Annual Report and Accounts 2018–19 2 Annual Report and Accounts The HOUSE of COMMONS: Administration

Annual Report and Accounts 2018–19

(for the year ended 31 March 2019)

Presented to the House of Commons pursuant to Section 1(3) of the House of Commons (Administration) Act 1978 and section 3 (as amended) of the House of Commons (Administration) Act 1978

Ordered by The House of Commons to be printed 17 July 2019

Published by Authority of the House of Commons

HC 2434 © Parliamentary Copyright House of Commons 2019 This publication may be reproduced under the terms of the Open Parliament Licence, which is published at www.parliament.uk/site-information/copyright/

Cover Image © UK Parliament/Jessica Taylor Designed by Michelle Thompson and Sumble Khaled, House of Commons Design Team. 01 Performance Report 01. Overview ...... 8 02. Performance Analysis ...... 34 02 Accountability Report 03. Corporate Governance ...... 60 04. Remuneration and Staff Report ...... 76 05. Parliamentary Accountability and Audit Report ...... 85 06. Parliamentary Accountability Disclosures ...... 90 07. Certificate and Report of the Comptroller ...... 91 03 Financial Statements 04 Annual Report of the Administration Estimate Audit and Risk Assurance Committee Performance Report 01

6 Performance Overview 8 Performance Analysis 34

Annual Report and Accounts 2018-19 7 Performance Report Overview

Joint foreword by the Clerk of the Over the past year, the House of Commons has been House and the Director General in the spotlight as the Brexit process has caused its procedures to attract national and international attention in a near unprecedented way. Brexit has dominated the political landscape, and the House Service has carried out its mission, to support a thriving parliamentary democracy. Staff from across the House Service and Digital Service have ensured that the business of the House of Commons has continued to run smoothly in often challenging circumstances, and Members have received year-round service of the highest quality. We would like to acknowledge our gratitude to the professionalism, energy, enthusiasm and commitment displayed by our employees.

8 Performance Report This continues to be a period of exceptional political The past 12 months have also been challenging, change and uncertainty. The UK’s future relationship following Dame Laura Cox’s independent inquiry into the with the European Union remains unclear, but there will bullying of House staff, which was published in October undoubtedly be an impact on the services we provide. 2018. The House of Commons Commission has agreed We will need to continue to report and broadcast to implement the three fundamental recommendations, the high-profile debates, resource select committees calling for the abolition of discredited policies, access appropriately to scrutinise the withdrawal process, to the grievance scheme for non-recent cases, and maintain the rigorous high standards and impartiality independence from Members in determining cases. of our research briefings, and ensure we are meeting While at times progress has been slower than we the needs of millions more people engaging with would have wished, we have to recognise that these parliamentary proceedings. are complex matters to address which need time to get right. To assist us in doing so, an Independent Director for Cultural Transformation has been appointed to translate Dame Laura’s wider recommendations into tangible, meaningful and lasting change.

Annual Report and Accounts 2018-19 9 Bullying and harassment have no place in the House constituencies. We are also continuing to improve of Commons. Addressing the issues raised by the Dame our cyber security systems, to stay one step ahead Laura Cox report is a top priority for every member of those who seek to harm us. of the Commons Executive Board. There is a lot of work required to get this right, which will include We are pleased that this year the Head of Internal implementing the recommendations from the 6 month Audit has, for the first time in 8 years, been able to review of the Independent Complaints and Grievance offer a moderate opinion in relation to the level of Scheme, conducted by Alison Stanley. In addition, the assurance. This shows that the work undertaken over publication of the Gemma White and Naomi Ellenbogen a number of years has improved our governance, risk reports into the experiences of Members’ staff and management, and control framework. This builds on House of Lords’ staff will require the House service to the signs of improvement that were identified last year, respond to any recommendations made in relation to and is a result of a number of cultural changes that our responsibilities. We will also need to provide the we have asked of staff. However, we must not allow best support to any staff affected. complacency to set in. We must strive to maintain this level and not to fall back in the coming years. Throughout the year, the level of activity around planning and delivering improvements to the Finally, we would like to thank Sir David Natzler KCB, Parliamentary Estate has continued to increase. The for his leadership of the House Service during his Sponsor Board for the Restoration and Renewal of time as Clerk, and for the contribution he made to the Palace of Westminster has been established in the House of Commons over his 43-year career. We shadow form, and the legislation to establish both the also pay tribute to Myfanwy Barrett CB, who leaves Sponsor Body and Delivery Authority on a statutory a legacy of substantial improvements to the House basis is currently progressing through Parliament. Service following her time as Finance Director and This is a significant change to the management of that latterly Managing Director of Corporate Services. programme, and we must be mindful of, and responsive These departures have led to significant changes to to the impacts this will have on the staff working on it. the Commons Executive Board, and we look forward Meanwhile, many other works programmes are under to working with the new appointees and our existing way across the Estate, including the refurbishment of colleagues to achieve our plans for the coming year. the Elizabeth Tower, fire safety improvements, and the refurbishment of a suite of buildings in the northern Dr John Benger part of the Estate. There are significant challenges Clerk of the House, House of Commons associated as well as opportunities with these building works, as we endeavour to plan for where staff and Ian Ailles Members will work when we cannot use the Palace. Director General, House of Commons This also means we must embrace digital tools, which give us new ways to talk and collaborate online, allowing people to work in any location with web access. We have also had to acquire additional work accommodation in anticipation of the major restoration and we want to design these workspaces to facilitate more modern ways of working, whilst being mindful of the need to ensure maximum value for money.

We have continued to work to mitigate security risks to the House of Commons, some of which have manifested in recent years and which we have learned lessons from. We are doing our utmost to respond to physical threats, to keep everyone on the Parliamentary Estate safe and secure at all times, and to support Members and their staff in their

10 Performance Report Annual Report and Accounts 2018-19 11 Who we are The House of Commons is the democratically Our mission and elected House of the UK Parliament. Its responsibilities include checking and challenging Government, making laws, setting taxes and debating the big strategic objectives issues of the day. The mission of the House Service is to support The House of Commons Commission is responsible a thriving parliamentary democracy. Our work for the administration and services of the House of focuses around three core objectives. Commons, including maintenance of the Palace and the rest of the Parliamentary Estate. It ensures that Facilitating effective scrutiny and debate the House of Commons is a safe, secure and respectful We will work as a team to support the business workplace. The Commission is chaired by the Speaker of the House. We will provide Members with and it includes Members, the Clerk of the House, the outstanding professional expertise, advice, Director General and two external commissioners. research, facilities and technology, based on a sound understanding of their needs and priorities. The House of Commons Service provides procedural Whatever our role, we will be valued by Members support and advice to Members along with a wide for our expertise, empathy, innovation and range of essential services that facilitate the work of customer service. the House. The Clerk is the Head of the House Service and the Director General chairs the Commons Executive Involving and inspiring the public Board. The governance structure is described in more We will open up the House of Commons to detail on pages 61-65. the public and show how it is essential to democracy, and changing for the better. Focusing More than 2,800 people work for the House Service, particularly on the young and marginalised, we many of whom provide a shared service to the House will create and promote opportunities to engage of Commons and the House of Lords. All our staff are in the House’s work, make it relevant and politically impartial and take great pride in the work accessible, and challenge misconceptions. they deliver. We will facilitate representation and enhance the reputation of the House in the UK and internationally through our work.

Securing Parliament’s future We will steer the House through the challenges it faces, balancing innovation with respect for cherished practices. We will work with the House of Lords to protect and enhance the physical fabric of the Estate, protect Parliament from threats and prepare for the future, while maintaining vibrant democratic processes. Whatever our role, we will respond flexibly to changing demands.

The Commons Executive Board is currently in the process of reviewing and refreshing the strategy for the House Service. The existing three key objectives will not change and it is likely that a fourth will be created, focusing on our people. The aim of creating the fourth objective will be to show how the House of Commons is committed to being an inclusive, diverse working environment, in which everyone feels valued and is treated with respect.

12 Performance Report Supporting a thriving parliamentary democracy

Our objectives

Involving and Securing Facilitating effective inspiring the public Parliament’s future scrutiny and debate We will open up the House to the We will steer the House through the We will work as a team to support public and show how it is essential challenges it faces, and prepare for the business of the House to democracy the future

To achieve

Impact Sustainability Satisfaction Reputation of MPs’ work on Govern- and the value for of our internal and of the House of ment anad wider public money of our services external customers Commons debate

Through our behaviours

Helpful Ambitious Proactive Collaborative We help our customers We aim high We deliver We work together and each other

Demonstrating our values

Maximising Fostering our skilled, Working impartially, Putting the customer Spending money the potential united and diverse inclusively and in at the centre wisely of digital workforce partnership

Annual Report and Accounts 2018-19 13 Our corporate culture •• The ‘Valuing Others Policy’ and the ‘Revised Above all else, the staff of the House of Commons Respect Policy’ – which Dame Laura concluded Service are proud to support Parliament and its were unfit for purpose – should both be Members. Our staff are impartial and put the customer abandoned as soon as possible, and members of at the centre of everything we do. As an organisation, House staff wishing to complain about bullying, we aim to be diverse and to reflect the public we serve. harassment or sexual harassment should no Our core organisational behaviours of being ambitious, longer be required to use them. collaborative, helpful and proactive help shape our •• The new Independent Complaints and Grievance culture, and ultimately we all have a responsibility to Scheme should be amended, so as to ensure act professionally towards others. that those House employees with complaints involving historical allegations could access In July 2018, the House of Commons launched a new the new Scheme. Behaviour Code for Parliament. The Code, which covers everyone in the parliamentary community, as well •• Steps should be taken, in consultation with as visitors, makes clear the standard of behaviour the Parliamentary Commissioner for Standards expected of everyone in Parliament. The Code is the and others, to consider the most effective way basis for a broader programme of cultural change. to ensure that the process for determining Simultaneously, the Independent Complaints and complaints of bullying, harassment or sexual Grievance Scheme was launched. Now approaching harassment brought by House staff against its one year anniversary, the Scheme is supported by Members of Parliament will be an entirely the Independent Bullying and Harassment Helpline independent process, in which Members of and the Independent Sexual Misconduct Advisory Parliament will play no part. Service. These helplines allow any staff member to receive expert, confidential support if they experience The House of Commons Commission accepted these or have concerns about bullying, harassment or sexual recommendations in full, and we have been working ever misconduct at work. Both helplines are provided by since to implement them, and to continue the process of trusted external suppliers. creating a more respectful, inclusive corporate culture, where our staff are protected from these behaviours. An additional milestone in October 2018, was the Julie Harding, the new Independent Director for Cultural publication of Dame Laura Cox’s report into bullying, Transformation was appointed in February 2019, and has harassment and sexual misconduct at the House of been driving forward the process of culture change. Commons. It exposed a range of shortcomings in the House’s historic approach to dealing with these issues Transforming our culture is not simply a priority for and put forward three key recommendations to the year ahead: it will be at the very heart of our enable the House to remedy the situation: corporate agenda going forwards. There is a lot of work required to get this right, which will include:

•• Delivering new training and support to House Service staff, Members and Members’ staff, to encourage respectful and inclusive behaviour and to promote the new independent support that is available around bullying, harassment and sexual misconduct. Introducing the new Independent Complaints •• Implementing the recommendations of the and Grievance Scheme 6-month review of the Independent Complaints and

This is a brief guide to the new arrangements. Grievance Scheme, conducted by Alison Stanley. You are strongly encouraged to read the full Delivery Report for the Independent Complaints and Grievance Scheme (available on the •• Responding to any recommendations made in intranet) for more details. relation to our responsibilities in the publication of the Gemma White and Naomi Ellenbogen reports into the experiences of Members’ staff and House of Lords staff. We will also need to provide the best support to any staff affected. parliament.uk Edition 1, August 2018 •• Providing regular, clear communications to staff, Members and their staff throughout the year.

14 Performance Report Behaviour Code Whether you are a visitor or working in Parliament at Westminster or elsewhere, there are clear guidelines in place on how you should be treated, and how you should treat others:

Respect and value everyone – bullying, harassment and sexual misconduct are not tolerated

If you have experienced bullying, harassment or sexual misconduct, you are encouraged to report it and/or seek support by contacting:

• Independent Sexual Misconduct Advice Service – 0800 112 4318

• Independent Bullying and Harassment Reporting Service – 0800 028 2439

Recognise your power, influence or authority and don’t abuse them

Think about how your behaviour affects others and strive to understand their perspective

Act professionally towards others

Ensure Parliament meets the highest ethical standards of integrity, courtesy and mutual respect

Speak up about any unacceptable behaviour you see

Unacceptable behaviour will be dealt with seriously, independently and with effective sanctions

Annual Report and Accounts 2018-19 15 What we do The House of Commons Service supports our democratic We work closely with the police to ensure the security process in many ways by delivering dozens of activities of those on the Parliamentary Estate by managing every day to ensure that the House of Commons can perimeter controls, searching and screening visitors, function effectively and efficiently. delivering a range of internal security measures and providing security support for Members working Ensuring the smooth running of the away from the estate. Chamber and committees We manage the delivery of everything from mail and First and foremost, we need to ensure that the House newspapers to food and IT equipment into and across of Commons Chamber, the debates in Westminster Hall the 16 different buildings that make up the estate, and and all committee meetings can function effectively. safely remove waste. This means having the right people in place to provide expert and impartial procedural advice for Chairs and Members, and preparing and publishing all the business Information and communications papers before and after each sitting. Our aim is to communicate proactively with all of our audiences in an open and transparent way, to Committee Office staff ensure that select committee increase understanding of the role, work, value and members are well briefed and supported in conducting impact of the House of Commons and its Members. evidence sessions and producing reports. The Communications Office develops our corporate communications strategy, sets the tone of voice for our Live feeds of Chamber and committee proceedings corporate communications and manages corporate are produced for TV and online broadcasting, and an media engagement. It also ensures that Members, their authoritative official record is compiled in Hansard. staff and House Service staff are kept well-informed at all times. Providing the facilities we all need to work The House of Commons Library provides a wide range Behind the scenes, we need to ensure that Members, of research briefings to all Members, on legislation, their staff and House Service employees have the right debates and other topical issues. These are also accommodation and equipment to do their jobs: clean, published on our website, allowing the wider public safe, secure offices and meeting rooms, a secure and to share our expertise and knowledge. The House of resilient network infrastructure, and the technology Commons Library also responds to research enquiries and systems we all need to support our work. from individual Members and their staff.

We provide catering services across several venues The Committee Office has a dedicated team of media in different buildings, from early in the morning until and digital communications specialists that support late at night. all select committees in promoting their activity, generating media coverage and driving engagement in their inquiries.

We have a UK Parliament website and a broad range of social media accounts that allow the House to communicate with the public about the many different activities taking place here.

Pepper the robot answers questions from the Education Committee on October 2018

16 Performance Report Annual Report and Accounts 2018-19 17 18 Behaviour Code Education and engagement Managing resources Involving and inspiring the public is a key part of the House Service strategy. We strive to provide a warm We need to manage our resources wisely: our people, welcome to everyone who visits Parliament, whether our money and our estate. We understand the for democratic access tours that are available to UK importance of attracting and retaining talented staff, to residents (hosted by a Member of either House), official enable the House to operate effectively and efficiently at business, educational visits or paid-for tours. In total, all times. We have robust processes in place to ensure over a million people visit Parliament each year. efficient planning and monitoring of expenditure, timely payment of employees and suppliers and effective management of our income. Beyond Westminster, we run outreach and engagement events across the country for children, for community groups and for university students, to explain how The Palace of Westminster is a Grade 1 listed building Parliament works and how they can get involved. and a UNESCO world heritage site. This, and the other We provide opportunities for the public to participate buildings that make up the Parliamentary Estate, in parliamentary business, including through need to be maintained on a daily basis to ensure e-petitions, interaction on social media and they remain a safe and functional place for all. At submissions to select committees. the same time, we are also planning and undertaking major refurbishments and upgrades of the fabric and infrastructure of the estate.

Annual Report and Accounts 2018-19 19 20 Behaviour Code £286.3m £22.1m gross resource expenditure total income

£141.5m 2,842 capital investment people employed by the House of Commons and Digital Service

Annual Report and Accounts 2018-19 21 SECURITY PASS ? 18,872 100,568 passholders with access parliamentary questions tabled to the estate

SCHOOL

416 86,704 Select committee reports school trips published to Parliament

22 Performance Report Annual Report and Accounts 2018-19 23 81,018 26,256 cases dealt with by the maintenance cases fixed Digital Service Desk

160 45.1m sitting days in the views on parliamentlive.uk main chamber

24 Performance Report Annual Report and Accounts 2018-19 25 Finance summary 2018-19 •• Members can now table and sign Early Day Motions online via the Members ‘eHub’ as The table below summarises our resource and capital well as table oral and written questions expenditure for 2018-19. More information about this electronically, thanks to improvements is contained in the Statement of Parliamentary Supply delivered in autumn 2018. Commentary on pages 88-90. •• We launched a new quarterly survey of Members in April 2018, undertaking 50 face-to-face Estimate Outturn Variance interviews every three months, identifying £ million £ million £ million required support and helping our customer team Gross resource expenditure 319.9 286.3 33.6 to follow up actions with relevant parts of the Income (17.8) (22.1) 4.3 House Service. Net resource expenditure 302.1 264.2 37.9 •• We expanded the range of services that we Capital expenditure 154.1 141.5 12.6 provide to Members and their staff, not only at Westminster but in their constituencies too. These include a new Health and Wellbeing Performance summary 2018-19 programme for Members and their staff which 2018-19 was a challenging year for the House of includes access to face-to-face counselling (near Commons Service, set against the backdrop of political home or work), access to specialist signposting uncertainty over the UK’s future relationship with services to practical support, greater access to the EU and the need to respond to the bullying and wellbeing support and increased staff resources harassment allegations. The following section provides in our in-house Parliamentary Health and an overview of our performance during the financial Wellbeing Service. year, highlighting the range and quality of work •• The Members HR Advisory Service helps Members delivered by our teams across the organisation. to be good employers of their staff. We also provide training on many HR topics, including Member services and support good employment practice, effective recruitment, developing staff and unconscious bias. •• We provided advice and support to Members to help them scrutinise Brexit, both in terms of •• We made improvements to the Commons Library the legislation itself and its wider implications. website to make it easier for Members (and We also delivered a comprehensive programme other audiences) to access the online resources of communications activity to help explain it provides, ranging from research briefings Brexit to our many audiences. to insight papers. The Commons Library also developed a new constituency ‘Help Hub’, to help •• An important new source of guidance for Members find information they need quickly in Members, the MPs’ Guide to Procedure, was responding to constituents’ requests. published on the UK Parliament website. It contains practical, clearly written guidance on •• We provided support to Members and their House of Commons procedure for Members and offices, at Westminster and in constituencies, their staff. This supplements the comprehensive to assist them in complying with new data guidance contained in Erskine May, the protection regulations. authoritative book on parliamentary law •• In January 2019, the Liaison Committee – and practice. comprising all the select committee chairs – launched an inquiry into the effectiveness and influence of the select committee system which scrutinises the work of Government and associated bodies. The inquiry is timed to coincide with the 40th anniversary of the creation of the departmental select committee system in June 2019. The Liaison Committee is due to publish its report in Summer 2019.

26 Performance Report Annual Report and Accounts 2018-19 27 28 45.1m Communications and public engagement Estates programmes •• There was a huge increase in demand for •• Significant challenges are posed by the scale coverage of, and information about, Brexit- and complexity of the Parliamentary portfolio. related House business during 2018-19. The size of the portfolio has increased We were able to meet this demand thanks to significantly in recent years, as has the extensive collaboration by communications complexity of the programmes and projects staff working across the organisation. we are trying to deliver, along with the (See pages 34 to 38 for full details.) interdependencies between them. As a result we have struggled to deliver to the original •• We launched a new ’Commons Votes’ website approvals set out in business cases. In light of in 2018-19, to work alongside the existing this we have had to reprioritise resources and CommonsVotes app. This allows users to see update timelines. The shadow Sponsor Board how Members have voted (or not voted) on any for Restoration and Renewal was established particular issue. during 2018-19. •• We also launched a new online tool to make Conservation work on the Elizabeth Tower has it easier to track the progress of statutory •• continued to progress as has that on Cast Iron instruments (secondary legislation), following Roofs. Other projects such as Westminster Hall recommendations by the European Statutory conservation and Canon Row refurbishment Instruments Committee. This service has have progressed less well. received positive feedback, and there is scope for its further enhancement in the future. Digital development •• Hansard is the official written report of all New desktop functionality has been made proceedings in both Houses. During 2018-19, the •• available to all of our network users through audio, video and text output of Hansard was the deployment of Microsoft Office 365. Office integrated, to create a more powerful offer to 365 offers new ways of collaborative and flexible Members, media and the public. This includes working, in particular through SharePoint. real-time logging across all venues, subtitling of video accessibility and on-demand content •• The roll-out of Skype for Business across the being made available to all users through online House Service was completed, helping to make platforms. Additionally, in July 2018, updated our organisation more resilient, flexible and Hansard website pages were launched, bringing efficient. A third of Members have also been together both daily and historical content back migrated to Skype so far and the remainder to 1803 in one place for the first time. are expected to migrate in Summer 2019. •• Throughout 2018, the House of Commons and •• In September 2018, we launched our new the House of Lords jointly delivered a high-profile recruitment website. This has delivered major public engagement programme called Vote 100, benefits for applicants and hiring managers to mark a series of historic anniversaries in the alike. Applicants are able to store applications evolution of British parliamentary democracy, electronically and also book interview slots most notably the creation of voting rights for online. For hiring managers, sifting information women through the Representation of the People is now available online. The new system Act 1918. also means management information will be easier to obtain. •• We enhanced and expanded our Open Access programme for audiences looking to develop •• In 2018-19 we intended to launch new sections their knowledge and understanding of of content on the Parliament website. In the event, Parliament. We held at least one event in every progress has not been as quick as we would region/nation of the UK to help those involved have liked. Following changes in the leadership in hosting events for our flagship annual public structure, our focus has been on establishing a engagement festival, UK Parliament Week. single technical direction and a more sustainable development and delivery model for Parliament. •• We also refocused our community outreach These changes have meant that some milestones sessions to help engage the disadvantaged and have now been rolled into 2019-20. In the longer disaffected in society, delivering a total of 760 term, however, these changes will improve sessions that attracted 21,485 attendees. efficiency and throughput and enable the Digital Service to deliver the outcomes Parliament needs in the timeframes it expects.

Annual Report and Accounts 2018-19 29 Improving efficiency Environmental improvements •• The Efficiencies Programme was completed •• In October 2018, we introduced a comprehensive on schedule, as a result of which £15.6 million range of initiatives to drastically reduce our of savings per year were identified and either consumption of single-use avoidable plastics. captured as budget reductions or reinvested •• In April 2018 the photovoltaic panels on the in other service areas. Going forward, we will Palace of Westminster went live. Full details ensure there is a sustained focus on spending of both of these initiatives are on page 55. public money wisely and delivering efficiencies. •• We ran a series of pilot schemes to encourage External recognition collaborative working, rethink how we use space, and empowering staff in reconsidering •• The House Service regularly benchmarks itself how they work. against other organisations and takes part in events to showcase the skills and achievements •• Despite a challenging trading year (due to of our staff. critical fire safety works and the cancellation •• We are proud to have climbed five places in the of the February recess) we have further reduced 2018 Stonewall Workplace Equality Index to 23rd the cost of the catering services. See page 90 place overall, ranking 4th within the Government for details. Sector section of the index. •• We were designated a ‘Disability Confident Improving security Committed and Employer’ (Levels 1 & 2) in a •• During 2017-18, we started to implement the government benchmark that helps employers outcomes of the reviews from the terrorist attack make the most of the opportunities provided on 22 March 2017. Our Security Programme and by employing disabled people. Board were established in 2017-18, to deliver and •• The Cyber Programme’s efforts were recognised oversee Parliament’s response to the physical outside Parliament, reaching the final of the security recommendations arising from the national ‘Cyber Security Awards’ 2018 for Murphy review of perimeter security. During ‘Cyber awareness plan of the year’. 2018-19, teams within both the Parliamentary Security Department and Strategic Estates have •• Family Traveller magazine recognised the been fully resourced to take this work forward, excellence of our tours for visitors with children, reflecting that security remains a top priority for which was nominated in the ‘Best UK Day Out Parliament. for Families’ category in their annual awards. •• We closed our Cyber Security Programme •• Phase 1 of Palace of Westminster External in March 2019. The programme achieved a Courtyards Conservation Project won two step change in Parliament’s cyber security accolades at the 2018 Natural Stone Awards. capability. Achievements for this year include Work undertaken to clean, repair and conserve better protection for remote workers (including the stonework of Chancellors’ Court and State constituency offices) against cyber-attack, Officers’ Court won the Repair and Restoration improved security and resilience for the category. The repair and redecoration of the Parliamentary Network and a reduction overall Norman Porch window carving received a in the number of malicious emails delivered. In commendation in the Carving, Lettering and 2019-20 efforts will be focused on maintaining Sculpture category. the level of cyber security risk within the stated •• In February 2019 three of our chefs won top appetite for both Houses. awards at the International Salon Culinaire 2019, the UK’s largest and most prestigious chef competition programme.

30 Performance Report Creating innovative constituency dashboards

This year the Commons Library launched The dashboards have been a collaborative new local data dashboards, online tools effort across the Library’s two statistical teams. that make it easy to find statistics about I helped run a project to get the software we use your constituency. Members and their researchers to make them, Power BI, and to get the first set of now have up-to-date local information at their dashboards up and running. fingertips, which saves time for them and us! ‘They’ve also proved a great way of engaging Getting the technology into the hands of our subject the public – our health dashboard featured specialists – with help from the Parliamentary in local news across the country, and one on Digital Service – has been really exciting. We now Magistrates’ court closures made the front have dashboards covering topics as diverse as page of The Guardian. social mobility, housing and Universal Credit, and there are more in the pipeline.

Cassie – Senior Statistics Researcher, House of Commons Library

Annual Report and Accounts 2018-19 31 Ensuring the wellbeing of all staff

In November 2018, the Parliamentary Health all employees have access to support when they and Wellbeing Service launched a new most need it. We recognise that for many, shift Employee Assistance Programme (EAP). and weekend working can be a barrier to seeking A single contract delivered by Health Assured was help and the EAP ensures there is equal access to put in place to cover all House staff, Members of support for everyone. both Houses and their staff, giving 24/7 access every day of the year to high-quality health and ‘ As part of the roll-out, I have been visiting our wellbeing support. teams across the House, giving them an overview of the range of services offered by the EAP. The EAP offers a variety of emotional and practical This has been a great way to meet new colleagues, support, including access to face-to-face learn about their work and share the wide counselling, wellbeing programmes, legal advice variety of health and wellbeing resources and guidance, and financial tools and resources to available to them. help manage money concerns and budget planning. This new service reflects our aim of ensuring that Tanya – Health and Wellbeing Manager

32 Ensuring the wellbeing of all staff Our plans for 2019–20

The House Service publishes an annual Corporate Business Plan1, in which we set out a range of key priorities and work streams for the year ahead. Some of the key operational goals we have set for 2019-20 are highlighted below.

•• New training and support will be delivered •• The various systems that support the to House Service staff, MembersOur and objectivesmanagement of the Parliamentary Estate Members’ staff, to encourage respectful will be reviewed, including strategic and inclusive behaviour and to promote implementation of an integrated the independent services available around workspace management solution. bulling, harassment and sexual misconduct. •• Changes to Library services will be •• A six-month review of the operation of implemented to ensure effective and the Independent Complaints and efficient use of specialist knowledge and Grievances Scheme (ICGS) will be expertise (the Library 2020 programme). undertaken. We will be providing regular, •• The UK Parliament website, our most clear communications about the ICGS to important public communication all staff throughout the year. channel, will be substantially improved •• The recommendations of the Gemma White and enriched. Inquiry (which is looking at the bullying •• Reliance on end-of-life operating systems and harassment of Members’ staff) will be (e.g. Windows 7) and infrastructure will implemented, subject to decisions of the be removed, and the roll-out of Skype for House where appropriate. Business will be completed. We will tackle under-representation of •• •• A web-based tool for drafting, amending women and BAME staff at senior levels, and publishing UK and Scottish legislation including Band A. will be developed. The Chair, Chief Executive and Board for •• •• A new Committee Information System the Shadow Delivery Authority for R&R will be created. will be recruited. •• A strategic outline business case for Progress will be made with the design •• evolving Parliament’s UK-wide presence phase of the Restoration & Renewal will be developed, looking at options (R&R) programme. that include regional hubs, strategic •• We will also support the passage of partnership funding and enhanced role legislation needed to establish the Sponsor of constituency offices. Body and Delivery Authority for R&R in •• We will begin the implementation of statutory form. the refreshed strategy for the House •• A multi-disciplinary decant team will be Service, ensuring that everyone across established to create a clear, single point the organisation understands the part of contact for House staff, Members and they play in supporting a thriving their staff as they relocate to different office parliamentary democracy. accommodation while the Northern Estate is refurbished.

1 House Service Corporate Business Plan 2019/20 – www.parliament.uk/documents/commons-commission/Commons-Management-Board/Corporate-Business-Plan-2019-20.pdf

Annual Report and Accounts 2018-19 33 Performance Analysis

Supporting the work of the House around Brexit Our Chamber and Committees Team has managed Brexit dominated the business of the House throughout the passage of this legislation, ensuring that 2018-19, leading to a surge in interest from the media the appropriate procedures have been followed, and the public. The House Service worked throughout amendments have been in order and documents have this period to deliver all of the expert advice and been prepared accurately. We have advised individual information needed by Members in scrutinising the Members on the tabling of amendments and on legislation required to pave the way for the United procedure, and ensured that the many high-profile Kingdom’s future relationship with the European Union. votes in the House have run smoothly.

We also delivered a comprehensive range of high- Since the 2017 general election, there have been quality communications support around the Brexit nearly 80 Brexit-related select committee reports process, from real-time coverage of Chamber and published and over 350 public evidence sessions by committee proceedings to facilitating media activity select committees related to Brexit at which over 1,000 at Parliament, publishing high-impact output across witnesses were examined. These have had a combined web and social media platforms, and producing a digital viewing figure of over 100,000. wealth of impartial briefings on Brexit-related matters. By the end of March 2019 the newly-established Chamber and committees European Statutory Instruments Committee had issued 22 reports, recommending how hundreds of statutory Passing the EU Withdrawal Act 2018 in Summer 2018 was instruments (pieces of secondary legislation) proposed the headline piece of legislation needed to implement by the Government should be handled in Parliament. Brexit. However, there are several other Bills needed to To support this work we launched a new online tool ensure that sectors of the economy such as agriculture, to make it easier to track the progress of statutory fisheries and trade can operate smoothly once the UK instruments. While this is still in development it has leaves the EU, as well as a continuing flow of secondary received positive feedback. legislation. Some of this legislation completed its parliamentary stages during 2018-19 but some is still Our online petitions website proved to be an extremely before Parliament and there is more to come. popular way for the public to demonstrate their views on Brexit. The ‘Revoke Article 50 and remain in the EU’ petition received over six million signatures by the end of March 2019, the largest ever petition submitted to the site. Conversely the ‘Leave the EU without a deal in March 2019’ petition received over 600,000 signatures, the second-largest petition on the site.

34 Performance Report Annual Report and Accounts 2018-19 35 Briefings and insights The House of Commons Library has played a key role A total of 2.5 million viewers watched live or recorded producing research which is easily accessible and coverage on parliamentlive.tv between January and understandable and focuses on the aspects of Brexit March 2019, 1.5 million more than for the same period that busy Members and their staff most need to know in 2018. March 2019 also saw the highest number of about. Our Brexit website brings together briefings viewers for the Commons Chamber in a single month on about the negotiations, legislation, policy briefings and parliamentlive.tv, exceeding one million online users for links to material published by other organisations. the first time.

We know that our outputs are being used widely: views The House of Commons Media Relations Team of briefing papers online increased from 162,000 in responded to nearly 2,000 calls and enquiries March 2018 to over 338,000 in March 2019 – an increase in the first quarter of 2019. It also ran temporary of over 100%. At the beginning of the year we had 1,000 media centres on six separate occasions, enabling subscribers to our briefings and insights service; over international news outlets, UK regional journalists and the last twelve months this has increased to 6,000. major commercial radio groups to cover Brexit-related There was a noticeable increase in traffic through the debates and votes directly from Parliament. UK Parliament website as a whole, with 3 million visitors in March 2019 and 10 million page views. Social media There was also a major spike in activity around Brexit The House launched a new web tool in early 2019, across our social media channels. The PBU worked based on the Digiminster app, to provide increased closely with the Parliamentary Digital Service to support access to division results and show how Members have livestreaming coverage of the Chamber on the UK voted, either in a specific division or on a given issue. Parliament YouTube channel, generating 5.4 million The tool also lists the Members with no recorded vote in views between January and March 2019, compared with divisions, creating increased transparency for all of our 1.8 million views for the same period in 2018. audiences. There were over 250,000 user requests for data during the 24 hours from the first ‘meaningful vote’ The House of Commons Twitter account experienced on Brexit and the subsequent vote of no confidence in substantial growth during this time. By the end of March mid-January 2019. 2019, @HouseofCommons had over 270,000 followers, over 12,500 of whom started following the account in Broadcasting and media March alone. The Parliamentary Broadcasting Unit (PBU) and its contractor BowTie TV were responsible for providing The House of Commons Library has also increased its all media outlets – both national and international – activity on Twitter. The number of people following with sound and picture coverage from the Commons @commonslibrary has grown to 24,100. Followers of Chamber and for live and recorded output on this account include over 50% of all Commons Members parliamentlive.tv. on Twitter as well as high-profile journalists and the BBC Press Office. The information being shared by the Commons Library is therefore being seen and amplified by influential media figures, increasing the reach of its impartial research.

36 Performance Analysis Explaining Brexit to the world’s press

In the excitement of Brexit, journalists the In bringing journalists closer to the action, we also world over discovered they were interested came closer ourselves – sometimes even having to in parliamentary procedure for the very first mediate between the broadcasters in the Central time, and that made us their first port of call. Lobby scrum immediately after the big votes, when they were all jostling for space and needed To bring them closer to the action, we worked as a referee. The first three months of 2019 were ‘a team (with a lot of help from colleagues!) to exhausting and rewarding in equal measure! create ‘pop-up’ media centres on the day of each Brexit-related vote, allowing them to access the Maev – Communications Manager public gallery, receive briefings on procedure and even broadcast live to Denmark, Japan and Argentina from Westminster Hall.

Annual Report and Accounts 2018-19 37 Transforming Parliament’s broadcast video coverage

Parliament’s Broadcasting Unit is opening Sky News. We also provide live coverage of every up access to the work of both Houses by proceeding through our own online streaming transforming the way that people are able to service, parliamentlive.tv. watch and listen to what is happening here – both in real-time and through recorded footage. We The team has also developed and delivered a are responsible for the audio and video coverage of all Chamber and committee proceedings in new video clip download facility. This has proved ‘ to be hugely popular with everyone who uses both Houses. On the busiest days (Tuesdays and Wednesdays), the Broadcasting Unit can distribute parliamentlive.tv – media organisations, the more than 80 hours of live coverage per day. public, our internal committee and Chamber teams, and of course Members, who are

finding it very helpful to support their own Working in partnership with a contractor, our public outreach activities. broadcast coverage is made available to more than 200 media organisations in the UK and beyond, including BBC Parliament and BBC News, ITV and John and Sally – Parliamentary Broadcasting

38 Performance Report Transforming Parliament’s broadcast video coverage

? ? ?

1.16m 2,300 the total number of visitors media enquiries answered to Parliament

1.51m 25,344 number of meals served research enquiries answered by the Commons Library

Annual Report and Accounts 2018-19 39 Managing the Parliamentary Estate Northern Estate Programme

Restoration and renewal of the Palace The building fabric of Norman Shaw North, of Westminster Norman Shaw South, 1 Derby Gate and 1 Parliament Street need refurbishment and the services need a The Palace of Westminster Restoration and Renewal major overhaul. The Northern Estate Programme (NEP) Programme was established to tackle the significant will refurbish these buildings. NEP will also develop the work that needs to be done to protect and preserve the additional space and facilities required for the House heritage of the Palace of Westminster and ensure it can of Commons to decant from the Palace, including an continue to serve as home to the UK Parliament in the operational Chamber, Committee rooms and House 21st century and beyond. support services. A Joint Committee on the Palace of Westminster It was originally anticipated that the outline considered an independent options appraisal and business case for NEP would be completed in Autumn made recommendations on a preferred way forward 2018. In the event, this was delayed and was not in a report in September 2016. Both Houses debated complete at year end. Various issues have arisen the proposals in early 2018, and agreed a Decision in during the year which have affected the timeline for Principle that Parliament would move out of the Palace the programme, principally: temporarily in a single phase. The Commissions of both Houses agreed that the Restoration and Renewal The delay in securing the use of the Ministry of Programme should be overseen by a Sponsor Body and •• Defence car park adjacent to Richmond House. Delivery Authority. •• The preparations needed to prepare the planning In Summer 2018, the Sponsor Body was set up in application for the demolition of Richmond shadow form until it is established as a statutory body, House and the erection of a secure perimeter. independent of Parliament. In its statutory form it Delays to the programme have had a financial impact, will own the budget, business case, and scope of the and are a significant contributory factor to the R&R Programme. The Board of the Sponsor Body is underspends on both the resource and capital budgets, comprised of seven Members from across both as explained on page 88. Houses and five external members. There has been better progress with other aspects The draft Parliamentary Buildings (Restoration and of the programme, including: Renewal) Bill was published in October 2018. This outlined the way in which the Sponsor Body and Delivery Fire safety improvement works required prior Authority would be established, and the mechanisms •• to refurbishment is almost complete. for providing accountability to both Houses and to the taxpayer. The draft bill was considered by a joint •• The manufacture of new gates for committee of both Houses, which published its report Commissioner’s Yard is almost complete, in March 2019. While the committee was broadly and preparations for their installation are supportive, it made a number of recommendations well under way. for changes, particularly around the ambition of the •• Contractors have started to refurbish the project and the essential areas of communication Derby Gate building. and accountability. The bill itself was introduced in May 2019 and passed its third reading in the Commons •• The public consultation for the Northern Estate on 19 June 2019. It now goes to the House of Lords Programme was launched in May 2019. for consideration.

40 Performance Report Annual Report and Accounts 2018-19 41 Strategic Estates portfolio delivery Interacting with external audiences

We face considerable challenges in undertaking a Visitors to Parliament substantial programme of refurbishment and repairs In October 2018 we launched new tour guide in a Grade 1 listed UNESCO World Heritage site that arrangements with a team of in-house Visitor remains a working Parliament, visited by over a Engagement Assistants delivering all tours. million people each year. As noted in the Performance (Previously this work was contracted to Blue Badge Summary on page 29, we have encountered difficulties Guides.) In January 2019 we launched a new multi- in undertaking some of our programme activity media guide for tours, which is now available in to the timescales initially outlined in the relevant nine languages, British Sign Language, along with business cases, and deadlines have slipped. Delays a separate guide for families. in programme delivery are the principal cause of underspends on both the resource and capital We have had excellent feedback ratings from visitors, estimates, as noted on page 88. We have experienced for both guided and audio tours – our composite difficulties in recruiting (or retaining) the right staff, measure was 92% satisfaction at year-end. While this particularly because we have to compete against was slightly below our target of 95%, we know that the market rates of pay. There are also interdependencies adverse reviews relate mainly to factors other than the between different projects and programmes, which quality of the tour itself, such as queuing times. means that a delay on one can have a knock-on effect on another. Unplanned-for events such as asbestos discovery and falling masonry has also caused delays. In the light of these delays we have had to reprioritise resources and update timelines.

Progress on other major estates projects has been mixed. Good progress has been made on the refurbishment of the Elizabeth Tower. In March 2019 the refurbished north clock dial was revealed after restoration. After extensive research this is based on what is now believed to be the original colour scheme. Temporary clock hands have been installed while the clock mechanism is being overhauled. Stone-cleaning continues, as does construction work to install a lift in the ventilation shaft.

Elsewhere we have not made as much progress in 2018-19 as we anticipated. A major project to undertake stone-cleaning and other conservation work in Westminster Hall – the oldest part of the Palace of Westminster – is not yet complete.

A programme of works across the Estate to achieve a higher standard of compliance of fire safety (life safety) was expected to end in December 2018. A range of different challenges were faced which has meant that while the most important packages of work have been completed, activity will continue into 2019-20. Similarly, work to refurbish the Canon Row building has been delayed, with fit-out now scheduled to start in Autumn 2019.

42 Performance Report Conserving the Elizabeth Tower

I am the Senior Project Leader in the Project Working on the project is a great honour but Delivery Team within Strategic Estates, also a huge responsibility. It is a complex, overseeing the refurbishment works to listed building and the whole world is watching. Elizabeth Tower. I am really looking forward to the day when the scaffolding is removed and we are The Elizabeth Tower is a symbol of the UK’s able to reveal the Tower, restored to its ‘democratic heritage and forms part of a UNESCO former glory! World Heritage Site. We have a duty to ensure that it is safeguarded for future generations to Charlotte – Strategic Estates appreciate, just as we owe it to our predecessors to restore their masterpiece to its former glory.

Annual Report and Accounts 2018-19 43 Engagement and outreach Overall, in 2018-19 we have engaged with over two million people: either face-to-face, digitally, or using our resources. Some 586 Members have actively supported education and engagement activities, and we have run over 1,300 activities across the country.

While continuing to provide a range of visitor services at Westminster, we also engage with people and communities across the UK. The majority of our community sessions are aimed at the young and marginalised. We work in partnership with a range of organisations, including voluntary organisations, faith groups and youth groups. We provide a range of different workshops, covering the basics of how Education Parliament works, how to get involved in the political process, along with sessions tailored specifically to We support teachers in their teaching of politics and women’s groups and adults with learning difficulties. the role of Parliament, and we encourage and help We also delivered 12 sessions in the Welsh language for young people to get involved in the democratic process the first time, establishing the outreach team as through the Education Service’s ‘Visit Parliament’ a bilingual provider in Wales. and regional outreach programmes. We also support Members from both Houses in their work with the The engagement events that we facilitated between public, especially young people. This work uses a the Petitions Committee and disabled people played a variety of different channels including on-line interactive key part in the report and recommendations on ‘online games and video packs for school age children and a abuse and disabled people’ with references and thanks range of teaching resources to be used in schools. to participants throughout the report. We arranged for young people to take part in the Science & Technology Committee’s inquiry The petitions website continues to be popular, with into ‘social media, screen use and young people’. over 1,500 new petitions added during the year. Aside They were referenced throughout the committee from the two large Brexit-related petitions mentioned report and thanked by the Chair of the committee on page 34, the next three most popular petitions in the Chamber. during 2018-19 were: Our education programmes inspire and engage •• ‘Ban all ISIS members from returning to UK’ – students of all ages, across the UK, with the work 596,782 (still open) and role of Parliament, focusing on how they can get involved and become active citizens. In total we •• ‘Make ‘netting’ hedgerows to prevent birds from hosted over 67,000 students on visits to our Education nesting a criminal offence’ – 339,467 (still open) Centre here in Westminster. Not all schools are able •• ‘Ban the sale of fireworks to the public. Displays to visit Parliament, so we have an outreach team of for licenced venues only.’ – 307,598 signatures staff working across England, Wales and Scotland2 (the Petitions Committee has started an inquiry to deliver sessions in schools. 2018-19 was a record- into this subject). breaking year, having reached 123,000 students in face-to-face sessions. We also worked with nearly 11,000 young people through the sessions we deliver with the National Citizenship Service.

Our Loan Box scheme has been particularly successful at engaging with students across the UK, with a reach of over 41,000 in 2018-19. This resource helps teachers run mock elections and activities on a variety of topics, engaging students with the work of both Houses.

2 Outreach activity will be extended to Northern Ireland in 2019-20.

44 Performance Report Voice and Vote: Women’s Place in Parliament

We were delighted to curate and manage historic furniture and fittings from Parliament’s the planning and delivery of ‘Voice and Vote: own collections. The exhibition also featured a Women’s Place in Parliament’, a ground- debating space, which allowed visitors to sit on breaking public exhibition staged in Westminster opposite benches and hold debates as Members Hall at Parliament from 27 June to 6 October of Parliament do. 2018 as part of Parliament’s Vote 100 project. The exhibition told the story of women in Parliament ‘ The exhibition attracted 107,000 visitors, with 79% over the last 200 years, particularly highlighting the campaign for votes for women and the of visitors saying that the exhibition had improved representation of women in the House of Commons their understanding of women’s role in Parliament and House of Lords. and a further 45% saying that ‘Voice and Vote’ had inspired them to take action and get involved To help visitors understand the barriers that with Parliament in the future. Very encouraging women have had to overcome at Parliament, a results from a very worthwhile project! series of important but lost spaces at the Palace of Westminster were recreated within the exhibition, Mari (Parliamentary Archives) and using a range of audio-visual features, along with Melanie (Curator’s Office)

Annual Report and Accounts 2018-19 45 Our People Staff engagement The House of Commons and Digital Service undertake As we have demonstrated in our business plan summary regular staff surveys to obtain views and feedback on page 33, we have a comprehensive action plan from staff about their work experiences. The surveys to address bullying and harassment, and we will be help senior management understand what works well looking at future staff surveys closely as an indicator within the organisation, identify any areas of potential of the cultural transformation we want to achieve. concern, and where improvements can be made. The Commons Executive Board is committed to encouraging Developing our people capability engagement and investment in our staff; completing Our staff play a vital role in delivering the House Service the surveys is an important part of developing the Strategy and people development is a top priority as we reputation and success of Parliament. seek to change the culture of the House of Commons in the wake of bullying and harassment cases. A key Our annual staff survey was held in May 2018. The part of this is developing a coaching approach to line response rate was 64%, which was an improvement on management. In 2018-19, some 474 members of staff the past two surveys (61% in 2017 and 58% in 2016). took part in different activities to develop their coaching skills. These covered topics such as setting goals and We include a range of questions asked in the giving feedback. Civil Service People Survey so that we can benchmark our scores. The headline results are shown in the table In Autumn 2018, we decided not to pilot a coaching below, together with how they compare to last year maturity assessment tool as planned, but to focus and to the Civil Service benchmark. instead on delivery of 90-minute coaching ‘workouts’. Instead, we have started a trial of a new approach ‘% agree’ ‘% agree’ to performance management which incorporates 2018 difference difference to ‘Manager Insight’: a survey of line managers by their score to 2017 benchmark direct reports. This will include seeking evidence of Employee using a coaching approach. 64% –3 +3 engagement score Proud to work for During 2018-19, we established a new, longer-term the House Service / 79% –3 +17 approach to nurturing talent within the House Service. Digital Service Central to this is a new ‘Future Managers’ programme, Recommend House Service / Digital Service focusing on developing greater management 69% –5 +14 as a good place to capabilities. The programme began in May 2019 with work 19 participants. Decisions around expansion of Strong attachment to this programme will depend on outcomes for the the House Service / 59% –4 +10 first cohort. Digital Service Feel valued and We aimed to have 25 apprentices in post by March 2019. appreciated for 50% –6 –16 work done In the event, we had 14 at year-end, although this figure increased to 30 in May 2019. Apprentices are Understand how work contributes 76% –10 –7 training in a range of different skills, including to the strategy finance, business administration, project management, customer service, retail and property maintenance. We acknowledge that the last year has been a We will continue to expand our apprenticeships scheme, challenging one, and part of the decline in these scores focusing on meeting the skills gaps in different parts since 2017 reflects staff concern over bullying and of the organisation. harassment. 18% of staff indicated in the survey that they had personally experienced bullying or harassment Changing the management culture of the organisation in the last twelve months, and 23% said they had and building a better talent pipeline will take time, but witnessed it. Other staff members were most commonly we will be monitoring the impact these new approaches identified as the perpetrators of these negative have and the benefits they deliver. behaviours. These scores give cause for concern.

46 Performance Report Annual Report and Accounts 2018-19 47 Diversity and inclusion Members’ staff We recognise that we need to improve the diversity Members’ staff are directly employed by the of senior leadership in the House Service and Member they work for and not by the House of have therefore made it a priority to tackle under- Commons Service. Pay and employment terms representation at senior levels in the new Diversity and conditions of Members’ staff are therefore the and Inclusion Strategy for 2019-22. This will focus responsibility of their Members. Nevertheless, we specifically on female and black and minority ethnic acknowledge that Members’ staff do not have access (BAME) representation. As part of this strategy, targets to professional HR services in the way that staff of the will be set for the representation of staff of the House, House do. We now therefore fund a telephone support benchmarking the data against the economically active services for Members’ staff, offering advice on issues population. For ‘mobile’ pay bands, including senior such as maternity/paternity rights, sickness absence, leadership pay bands A and SCS, we will set targets annual leave, conduct and grievances. based on the national population. Following a pilot scheme in 2017-18, we have now In June 2018 we held the 6th Parliamentary Diversity made our induction arrangements for Members’ staff and Inclusion awards. This annual event is held to permanent. In 2018-19, we had 115 people attend the celebrate everyone’s efforts to make Parliament a induction. We know we need to improve the take-up more diverse, accessible and inclusive place. The event of this, so we are now including invitations with new showcased this work and celebrated the achievements security passes for Members’ staff and ensuring that of both Houses and of individuals and teams. it is publicised in relevant newsletters.

House of Commons & Parliamentary Digital Service DIVERSITY & INCLUSION AWA R D S 2019 unity

Nominations are now open!

Any House of Commons passholder can nominate or be nominated

Includes Parliamentary Digital Service, Members, Members’ staff and bicameral staff Nominations close on 30th April

Winners will receive a certificate and trophy at our awards ceremony at the BBC studios

intranet.parliament.uk/diversityawards

48 Performance Report Building expertise through professional studies

I originally joined Parliament in 2014 as an accountants. My studies are being sponsored by the agency worker, three years after moving to the House. The qualification enables professionals like UK. Now a full-time employee of the House me to make significant improvements to corporate Service, I lead on key compliance processes around finance functions, strengthen financial management statutory deadlines, compliance controls, risk, KPIs capabilities and put finance at the centre of decision- and month end processes. I have recently completed making. This is a great example of how the House is ‘a debtor’s process review to ensure that all our investing proactively in its staff by providing training debt processes are aligned to the House’s credit opportunities and supporting career development. management policy. Since the introduction of GDPR last year, I have compiled various checklists and I am so proud to work in this historical institution parameters to review our supplier Masterfile data to and I have been lucky enough to attend the State ensure that it is compliant with the new regulation. Opening of Parliament – I felt like I was part of history in the making. I am currently studying for the ACCA Qualification, a globally respected qualification for professional Michael– Compliance Officer

Annual Report and Accounts 2018-19 49 How we measure performance Customer satisfaction Since the beginning of 2018-19, we have undertaken There are three main strands to our approach to a quarterly survey of Members focusing on ten key corporate performance measurement during each service areas (eleven from Q3 onwards). Overall, financial year: the performance framework, risk Members’ satisfaction with House services averaged management and portfolio reporting. 4.1 out of 5 (where 1 means ‘very dissatisfied’ and 5 means ‘very satisfied’). There were significant Performance framework variations between different service areas, however, as the chart below shows. Our performance framework contains both operational performance measures and strategic outcomes. It is We also monitor the satisfaction of different visitor reviewed by the Commons Executive Board monthly groups. The satisfaction scores for visitors on our (with a dedicated meeting each quarter). The Finance paid-for tours scored over 90% almost all year. Committee and the House of Commons Commission These are composite scores which bring together receive a highlight report each quarter. The four scores for the booking process, the tour itself and strategic outcomes for 2018-19 are described below. reviews on the Trip Advisor website. Teachers bringing school groups to our Education Centre gave satisfaction scores of over 95% throughout the year.

Average satisfaction scores Q1–Q4

Overall satisfaction with services 4.5

Library 4.6

Chamber and committees 4.5

Visitor and education 4.3

Security 4.0

Hub 4.0

Catering 3.8

HR 3.7

Offices and facilities 3.6

Comms 3.5

PDS 3.3

Website and intranet 3.2

0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5

50 Performance Report Impact Sustainability The Board commissions a short case study each quarter The focus of our sustainability measures is on to showcase how the work of the House Service benefits our people, our finances and our environmental the House of Commons and its Members. Over the last performance. Our people measures include sickness year, these case studies have focused on work including absence, staff turnover, vacancy rates, satisfaction the development of Hansard Online, select committee with in-house learning and development, the number social media activity and communications activity of appointments with our Health & Wellbeing Service, delivered in support of the House’s work around Brexit. and the number of contacts with the Employee Assistance Programme. In January 2019, the Liaison Committee, formed of the chairs of all the select committees, launched an We measure our financial sustainability by monitoring inquiry into effectiveness and influence of the select our spending against budget and compliance with committee system. The inquiry has been timed to internal policies. coincide with the 40th anniversary of the creation of the departmental select committee system in 1979. The Our four long-term environmental targets are carbon inquiry has now concluded and the Committee is due reduction, a reduction in water usage, reduction in to publish its report in Summer 2019. We will look at the waste and increase in recycling. More information recommendations to see if there are ways in which we about our environmental performance is available can improve our measurement of impact in this area. on pages 53 to 56.

Reputation The task of understanding and monitoring the House’s reputation is by definition challenging, principally because of the wide range of factors that can influence the way we are perceived by our many different audiences.

During 2018-19, we conducted two pieces of research to start building a picture of how the House of Commons is perceived by the public, to generate new insights that can support our future strategic and tactical planning. On each occasion, over 500 members of the public were questioned about their perceptions of the House and its work.

The research covered a broad range of topics, including the importance of the many different activities that are delivered ‘behind the scenes’ by the House Service. The public told us that the areas of activity they regarded as being the most significant contributions by the House Service were:

•• Producing impartial briefing papers on topical issues for the public and academics in addition to the primary audience of Members •• Running the infrastructure and estate for the House of Commons efficiently and reducing environmental impact •• Running a schools’ education programme, on site and in schools across the UK •• Recording and providing live videos of debates and committee inquiries online and through television broadcasters

Annual Report and Accounts 2018-19 51 Portfolio reporting In 2018-19, 246 incidents and near misses (narrowly- A significant part of achieving our strategic goals relies avoided accidents where no injury or damage occurred) upon the successful delivery of various projects and were reported to the Parliamentary Safety Team. Five programmes across the House Service. The current of these required notification to the Health and Safety parliamentary portfolio comprises 18 programmes Executive under the Reporting of Injuries, Diseases and and 159 projects (of which 13 are major, standalone Dangerous Occurrences Regulations (RIDDOR). Just projects). Together, these account for £2 billion of over half of reported incidents resulted in an injury; the investment over the next four years (House of most frequent being as a result of a slip, trip and/or fall, Commons share £1.4 billion), helping to secure which is in keeping with the national picture. There were Parliament’s future.3 no serious injuries. Around 50% of the near misses were caused by ‘premises faults’ – damaged flooring, poor Our Enterprise Portfolio Management Office (EPMO) lighting, wet floor, etc. These were forwarded to the maintains oversight of all project and programme Parliamentary Maintenance Service Team for repair and activity across both Houses of Parliament and the to Strategic Estates to investigate anything related to Digital Service. It reports on project and programme the building fabric. activity – overall delivery confidence, time, cost, benefits, resources, risk and dependency – to the Safety management and compliance are discussed Boards of both Houses (and the Joint Investment Board) in the Governance Statement on page 75. to monitor progress and help ensure that the change the organisation wants is delivered. Data requests and incidents In 2018-19 the House of Commons processed 555 Other corporate reporting requests for information which were handled under either the Freedom of Information (FOI) Act or the Health and safety Environmental Information Regulations. We met the We place great importance on protecting the health statutory response deadlines in 98% of these cases. and safety of all those who visit or work in our premises. Where some or all of the information is disclosed, The Parliamentary Estate has a wide and complex we publish selected responses, particularly if they safety risk portfolio. In addition to being the place of are topical or where there is interest from more than work for Members of both Houses, their staff, and staff one requester. of both Houses, Parliament is a major tourist attraction. There are significant demands on accommodation We also publish all responses that contain datasets, and an extensive programme of construction and in accordance with our obligations under Section 11 of maintenance activities. All of these activities are co- the Freedom of Information Act 2000. These can be located in a relatively compact location and potential viewed on our disclosure log on the Parliament website. safety risks need to be carefully managed. Our main FOI page contains information about our publication scheme, how to make an FOI request and our transparency publications.

The House of Commons actively encourages the reporting of all information incidents, including low level or localised incidents. We continually seek to manage the risks to all our information, ensuring that any weaknesses are identified, and improvements made to avoid a re-occurrence. In 2018-19, no incidents were judged to be notifiable in line with our obligations under the General Data Protection Regulation (GDPR) and therefore no reports were made to the Information Commissioner’s Office (ICO).

3 Approximately £1.4 billion (Commons share £1.1 billion) of this total relates to R&R and NEP. R&R funding will transfer to the Delivery Authority once it is established. The option to move NEP programme – and funding – into the Delivery Authority is under consideration.

52 Performance Report Supplier payment performance The main source of Parliament’s carbon dioxide In 2018-19 87.1% of supplier invoices were paid within emissions is energy consumption across the Estate. 30 days of receipt, almost exactly matching the Parliament’s long-term target is to reduce absolute performance of 2017-18 (87.2%). This small fall was carbon dioxide emissions from energy use by 34% by despite a 10% increase in the volume of invoices this March 2021, relative to the baseline. To be on track to year (45,305 compared to 41,117 in 2017-18). The figures meet this target, our 2018-19 emissions should have demonstrate that we can maintain performance with fallen by 28.6% against the baseline. In the event, a reduced frequency of BACS payment runs (weekly we achieved a 43.5% reduction and exceeded the in 2018-19 compared to twice weekly in 2017-18). The target for the year. The graph below shows how we have increased volume of invoices reflects the level of project reduced carbon emissions since 2008-09. The target and programme activity across Parliament in addition line has been recalibrated periodically as buildings have to business as usual. been added to the Parliamentary Estate (or given up).

Climate change, sustainability and the environment This section follows – as far as possible and to the extent it is appropriate – the template and guidance issued to Government departments in HM Treasury’s Financial Reporting Manual. All the data (including expenditure) relate to Parliament as a whole. In each case baselines refer to 2008-09 while the target year is 2020-21.

GREENHOUSE GAS EMISSIONS 4 2015-16 2016-17 2017-18 2018-19 Non-Financial Total Gross Emissions for Scopes 1 & 2. 17,781 17,550 16,343 13,176 Indicators Total Net Emissions for Scopes 1 & 2. (tCO2e) (i.e. fewer green tariffs) 4,623 10,760 16,343 13,176

Gross emissions Scope 3 business travel 1,521 1,952 1,434 1,908 Related Energy Electricity: Non-Renewable 1.05 27.2 28.32 26.68 Consumption Electricity: Renewable (million kWh) 26.27 0.93 0 0.01 Gas 24.56 29.21 29.94 27.26 Financial Indicators Expenditure on Energy 3,835 3,996 4,020 5,124 (£’000s) Expenditure on accredited offsets (e.g. GCOF) 0 0 0 0

Expenditure on official business travel 4,632 5,398 4,734 5,074 Glossary

The following scopes of carbon dioxide (CO2) emissions are defined in HM Treasury’s Financial Reporting Manual: Scope 1: Direct emissions of greenhouse gases Scope 2: Energy indirect emissions Scope 3: Emissions as a result of official business travel tCO2e: tonnes of carbon dioxide equivalent kWh: kilowatt hours GCOF: Government Carbon Offsetting Facility

4 Parliament’s total gross carbon emissions for 2018-19 reflect the 2018 conversion factors provided by the Department for the Environment, Food and Rural Affairs for reporting purposes. The 2019 conversion factors were not available at the time of publication.

Annual Report and Accounts 2018-19 53 CO2 emissions

25000

20000

15000

CO2 tonnes 10000

5000

0 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Carbon Produced Carbon Target

Expenditure on energy increased from £4.0 million in 2017-18 to £5.1 million in 2018-19. This is mainly due to the increase in the size of the Parliamentary Estate, having taken on Richmond House at the beginning of the financial year.

WASTE 2015-16 2016-17 2017-18 2018-19 Non Financial Total wastea 1,467 1,778 1,959 1,495 Indicators Hazardous waste Total 4 4 7 8 (tonnes) Non-hazardous Landfill waste 0 0 0 0 Reused/Recycled/ Recoveredb 914 1,132 1,223 888 Incinerated/energy from waste 549 641 728 599 Financial Total Indicators disposal cost 561 539 415 432 (£’000s) Hazardous waste – Total N/Ac 7 16 18 disposal cost Non-hazardous Landfill waste – Total 0 0 0 0 disposal cost Reused/Recycled N/Ac 89 207 222 Incinerated/ energy c from waste N/A 73 191 189 Notes:

a Figures may not agree due to rounding. b Figures restated from those published in 2018. c P arliament’s previous waste contract did not break down costs by waste stream, but was priced on the basis of an aggregation of standing charges, costs per collection and per tonne. There was no breakdown of annual costs of hazardous and non-hazardous wastes.

54 Performance Report Parliament’s environmental improvement plan sets In May 2018, Parliament announced a comprehensive out a range of actions that have been put in place to range of steps to drastically reduce its consumption improve energy efficiency, and is updated annually. of single-use plastics, with the following initiatives We are currently reviewing the electricity we procure implemented during the year: so that we can once again source from 100% renewable generation. (Parliament used to procure from 100% •• Replacing the non-recyclable catering renewable sources, but this is not currently possible disposable items such as take-away boxes, soup through Crown Commercial Services (CCS), who we are containers, take-away cups and cutlery with obliged to source utilities from.) sustainably sourced, plant-based and certified compostable alternatives Achieving a reduction in Parliament’s direct carbon •• The introduction of new pedal bins for the emissions (scope 1 and 2) continues to be a priority, but, collection of the new compostable range, where appropriate, procurement specifications are used from where it is separated and will be sent to to encourage and specify requirements for reductions a specialist facility from July 2019 for in-vessel in our supply chain. Parliament is currently working composting which will use a combination of to develop a methodology which will assess carbon heat and microbes to turn the waste into emissions from its supply chain. compost fit for any garden

In April 2018 the photovoltaic solar panels on the •• The removal from sale of water in plastic Palace of Westminster went live. This generated bottles, immediately eliminating 120,000 a total of 10,167kW/h of electricity in 2018-19 – plastic bottles annually equivalent to 0.04% of Parliament’s electricity •• Customers purchasing hot drinks served in consumption. While this is just a small percentage single-use take-away cups are now charged of our total energy consumption, it is an important 25p extra, which will contribute to the increased step in our efforts to be more sustainable. Looking costs to Parliament associated with the ahead, there are considerable opportunities to identify reduction in plastic strategy carbon savings as part of our major refurbishment programmes. The Environment Team are fully involved in working groups for both the Restoration and Renewal and Northern Estate Programmes. RIGHT Parliament operates with a zero waste to landfill policy, and our general office waste is disposed of WASTE by incineration at an energy-from-waste facility. Our long-term target is to reduce the amount of RIGHT waste we generate (measured by weight) by 30%. In order to meet this target, we should have reduced BIN our waste by 26% by the end of 2018-19. The actual figure achieved was 29.2%, exceeding the target. Our recycling rate was 59% in 2018-19, against a target of 72% for the year.

We continue to prioritise achieving a reduction in NOT CONFIDENTIAL waste generation and improvements in recycling rates. WASTE Where appropriate, the development of procurement specifications has been introduced to drive an Dry mixed Compostable General waste recycling items & for incineration improvement in performance within the supply chain. food waste

For more information please visit the Environment pages on the Intranet or email [email protected]

Annual Report and Accounts 2018-19 55 •• The removal of condiment sachets from Waste audits have taken place and training on the catering areas replacing them with refillable segregation of waste has been undertaken with those dispensers of condiment bottles, eliminating responsible for transferring and consolidating waste on 330,000 annually the estate. We regularly hold awareness-raising events to encourage positive behaviours in relation to waste •• The promotion of a range of stationery which and recycling, helping to ensure people know what to has established green credentials recycle and which bins to use. Whilst good progress has been made against our Revised procedures will shortly be implemented to target for the volume of waste generated, the incorporate the environmental impact of packaging proportion of waste recycled has not improved to the into relevant procurement and tender exercises. These same extent, and has actually fallen back slightly. Part procedures will encourage suppliers to reduce the of the reason for not meeting the latter target is that amount of tertiary packaging. items such as plastic bottles, previously recycled, have now been completely removed from our waste stream and no longer contribute to our recycling rate. This is in keeping with the waste management hierarchy of ‘reduce, reuse, recycle’.

FINITE RESOURCE CONSUMPTION – Water 2015-16 2016-17 2017-18 2018-19 Non Financial Water Consumption Supplied 116,176 91,567 77,467 87,595 Indicators (m3) Abstracted 82,010 94,793 107,055 160,622 Financial Water Supply Costs Indicators 275 204 324 231 (£’000s)

Our long-term target for water use is to reduce We also experienced two major faults with the borehole consumption by 50% relative to the baseline by March control equipment during the year, which caused 2021. In order to meet this target, Parliament’s water abstracted water to be discharged directly to the use should have fallen by 42.4% by the end of 2018-19. sewer rather than being used in Portcullis House. In the event the figure achieved was only 24.5%. These faults contributed approximately 60% of the increased consumption in 2018-19. The increase in mains supplied water in 2018-19 was mainly a reflection that consumption in 2017-18 was The expectation for the future is that the Northern lower than normal. This was due to reduced occupancy Estates Programme and Restoration and Renewal will and use of Parliamentary buildings during the General utilise abstracted water for cooling and grey water use. Election period. 2018-19 consumption is more reflective This approach is preferred over electrical cooling and of a standard year, and still represents a reduction on ventilation, as water is a renewable resource. While 2016-17 figures. this will increase our water consumption it will mean lower carbon emissions. Where relevant, specifications Parliament uses water abstracted from boreholes to are developed for procurement exercises which have a cool Portcullis House. This water is then reused as ‘grey potential impact on water use to ensure water efficiency. water’ for flushing toilets. Using abstracted water for these purposes has a significantly lower environmental John Benger impact than using mains water supply, as it is naturally Accounting Officer replenished. Summer 2018 saw a sustained period of warm weather, and around 40% of the increase in 9 July 2019 abstracted water consumption in 2018-19 was due to the increased cooling requirement in Portcullis House.

56 Performance Report Helping to reduce single-use plastics

In June 2018, we started the process of stalls, as well as guidance materials (including a reducing single-use plastics at Parliament range of posters, bin labels and FAQs) to encourage with the sale of re-usable cups. Later in customers to put the ‘right waste in the right bin’. the year, we removed plastic water bottles from sale and replaced non-recyclable takeaway food I am incredibly proud to have played a key role in containers, cups and cutlery with compostable helping to reduce the amount of single-use plastic plant-based alternatives. Additionally, refillable ‘ that Parliament consumes. It has been highly dispensers and condiment bottles have been introduced, eliminating the use of single-use rewarding to be part of these campaigns and plastic condiment sachets. to work with colleagues across the Estate who have helped the Environment Team New bins to capture the compostable items achieve these sweeping changes. were distributed to kitchens and offices across the Parliamentary Estate and we launched an Abigail – Environmental Coordinator, awareness campaign using the parliamentary In-House Services intranet, team newsletter articles and ‘drop-in’

Annual Report and Accounts 2018-19 57 Accountability Report 02

58 Accountability Accountability Report

Corporate Governance 60 Remuneration and Staff Report 76 Parliamentary Accountability 85 and Audit Report Parliamentary Accountability 90 Disclosures Certificate and Report of the 91 Comptroller and Auditor General of the House of Commons

Annual Report and Accounts 2018-19 59 Accountability Report Corporate Governance

Statement of Accounting Officer’s The responsibilities of the Accounting Officer include: Responsibilities •• Responsibility for the propriety and regularity The House of Commons (Administration) Act 1978 of the public finances for which an Accounting gives the House of Commons Commission the power to Officer is answerable, for keeping proper records appoint the Accounting Officer. The Accounting Officer and for safeguarding the organisation’s assets, is responsible for accounting for the use of resources as set out in Managing Public Money published for the service of the House of Commons. by HM Treasury. •• Confirming that as far as he is aware there is no The annual report and accounts are prepared on relevant audit information of which the auditors an accruals basis and must give a true and fair are unaware, he has taken all the steps he ought view of the state of affairs of the House of Commons to have taken to make himself aware of any Administration, the net operating cost, changes in relevant audit information, and to establish that taxpayers’ equity and cash flows for the financial year. the auditors are aware of that information. •• Confirming that the annual report and accounts In preparing the annual report and accounts, the are fair, balanced and understandable and Accounting Officer is required to comply with the that he takes personal responsibility for the requirements of the Financial Reporting Manual annual report and accounts and the judgements as applied by the House of Commons. He should required therein. ensure that the accounts:

•• Observe the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis. •• Include judgements and estimates made on a reasonable basis. •• State whether applicable accounting standards, as set out in the Financial Reporting Manual as applied by the House of Commons, have been followed, and disclose and explain any material departures in the accounts. •• Have been prepared on a going concern basis.

60 Accountability Report Governance Statement5 As Accounting Officer, I am required to prepare an annual governance statement. This statement The House of Commons Commission is the ultimate records the stewardship of the House of Commons authority for the administration of the House, but day Administration, drawing together evidence on to day management of the organisation is delegated to governance and risk management. The statement is the House of Commons Executive Board. As Accounting intended to give a sense of both the House of Commons Officer, I am mindful of HM Treasury’s guidance on the Administration’s vulnerabilities and also how the scope of the governance statement as it applies to organisation has coped with the challenges it faces Government departments, but I emphasise that the during the year. House’s constitutional and governance circumstances are different to those of Government departments. Governance framework of the House of Commons In recent years the Governance framework of the House Likewise, the extent to which the House Service is has undergone substantial changes, following the able to follow the Treasury’s Corporate Governance report of the House of Commons Governance Committee Code will differ. Significant variations from the Code and the subsequent House of Commons Commission include the fact that the Commons Executive Board Act 2015. Further changes arose from an organisational (CEB) is not equivalent to the single management review conducted by the Director General, and from a board of a Whitehall department. I am content that the review of the operating arrangements of the Commons House Service’s structure meets the overall objective Board in November 2017. of separating policy and operations, and that the necessary element of non-executive challenge and The House of Commons has a robust governance scrutiny is available through the external members of framework. The governance structure is designed the Commission and the Administration Estimate Audit to manage risk to a reasonable level rather than to and Risk Assurance Committee. eliminate all risk of failure to deliver services, aims and objectives; it therefore provides reasonable and Scope of responsibility not absolute assurance. The structures and controls I was appointed as Accounting Officer by the Speaker, provide clarity and accountability in managing the on behalf of the House of Commons Commission, delivery of the House Service’s administrative objectives. with effect from 1 March 2019 in accordance with They ensure the House Service has the capacity to section 3, subsection (2) of the House of Commons make decisions, monitor performance and assess and (Administration) Act 1978. manage resources and risk.

Under the terms of my appointment, I am responsible for The House of Commons Service is governed by the ensuring that resources authorised by Parliament and Commission, which is chaired by the Speaker. The sums to be paid out of the Consolidated Fund, in respect Commission sets the strategic framework for the of the House of Commons, are used for the purposes provision of services to the House, Members and to intended by Parliament. I am responsible for the the public; signs off the annual budget (the Estimate) preparation of the House of Commons Administration for the House; and is the legal employer of House accounts and their transmission to the Comptroller and Service staff. Auditor General. I am also responsible for the use of public money and the stewardship of assets. The Commission has delegated day-to-day management to the CEB since November 2017. In delivering this role I am supported by the House The CEB is accountable to the Commission for the of Commons Commission, the Commons Executive delivery of the strategy for the House Service and Board and its sub-boards. also manages the day to day operation of services.

5 The House of Commons Members’ Estimate is the subject of a separate Governance Statement published with the House of Commons Members’ Annual Accounts

Annual Report and Accounts 2018-19 61 Commission Speaker, Leader of the House, Nominee of the Leader of the Opposition, Backbench Commissioners x 4, External Appointees x 2, Clerk of the House, Director General of the House of Commons

Commons Administration Executive Board Estimate Audit & Risk Assurance Committee The Director General of the Finance Administration 2 Backbench Commissioners, Committee Committee House of Commons (Chair), the Clerk of the House, the 1 Member of the Finance 11 Members 11 Members Managing Directors of House Committee, 2 External Teams and Directors of Appointees of the bicameral departments Commission, 1 External Appointee Prepare Deliver Prepare Assure

House Service

62 Accountability Report Annual Report and Accounts 2018-19 63 The Commission is supported by two Select Organisational structure of the House Committees of the House which act as advisory bodies of Commons Service to the Commission. The Administration Committee, There have been no major changes to the organisational chaired by Sir Paul Beresford MP, recommends structure during the financial year 2018-19. The House improvements to services. The Finance Committee, of Commons Service was comprised of the following chaired by Chris Bryant MP, considers expenditure Teams, a number of which provide shared services to and the House’s budgets. the House of Lords:

The Commission is also supported by the Administration •• Chamber and Committees Estimate Audit and Risk Assurance Committee •• Research and Information (AEARAC).6 The AEARAC supports the Accounting Officer in discharging his responsibilities under the •• Participation Administration Estimate, particularly with regard to •• In-House Services the maintenance of an effective system of internal control. Since April 2017, the AEARAC has also had an •• Corporate Services enhanced role in providing independent assurance to •• Strategic Estates the Commission, and to the Accounting Officer, that the system of risk management is operating effectively •• Communications Office and that risk is being effectively managed by the •• Governance Office organisation and monitored by the CEB. The AEARAC Parliamentary Digital Service (a joint also has oversight of the work of Internal Audit and •• department with the House of Lords) the external audit carried out for the House by the Comptroller and Auditor General. More detail about •• Parliamentary Security Department the AEARAC is provided in their annual report (serves both Houses) (page 132-140). From 1 April 2019, Corporate Services became two teams: HR and Diversity; and Finance, Portfolio and Performance. The Cultural Transformation Team was established in February 2019 to lead on cultural change in the Commons, translating the recommendations from the Dame Laura Cox report into tangible, measurable and lasting change and holding the CEB to account for delivering this change. In addition, on 1 July 2019 the Governance Office and the Communications Office joined together to create a brand-new central resource for the organisation.

The House of Commons Service is also supported by the Parliamentary Procurement and Commercial Service, a shared service based in the House of Lords Finance Department, and the Parliamentary Archives, also based in the Lords.

6 The House of Commons has two Audit Committees, one for each of its Estimates. The AEARAC, on behalf of the Commission, and the Members Estimate Audit Committee (MEAC), on behalf of the Member Estimate Committee (MEC). The annual accounts and Audit Committee report for the Members Estimate are published as a separate document.

64 Accountability Report Governance Structure

Speaker’s Supports Advises Consultative Panel Office on Parliamentary Speaker Security Advises

Works of Art Committee Chairs

Administration Commission Estimate Finance Advises Appoints Audit & Risk Committee Chairman: The Speaker Assurance Committee

Administration Advises Committee Attends

Clerk of Assures the House

Director General Delegates power to Chairs

Commons Executive Board Manages

Parliamentary Chamber and Communications Corporate Governance Committees Services Digital Service*

Parliamentary In-House Participation Research and Strategic Security Services Information Estates Department

* Joint service with the House of Lords

Annual Report and Accounts 2018-19 65 House of Commons Commission Under the House of Commons (Administration) Act 1978 (as amended by the House of Commons Commission Act 2015), the House of Commons Service is overseen by the House of Commons Commission.

The membership of the Commission during 2018-19 was:

Name Served Attendance The Rt Hon John Bercow MP; Speaker (Chairman, by virtue of office) full year 10/10

The Rt Hon Andrea Leadsom MP; Leader of the House of Commons (by virtue of office) full year 9/10

Sir Paul Beresford MP full year 10/10

Rt Hon Tom Brake MP full year 5/10

Stewart Hosie MP full year 8/10

Valerie Vaz MP full year 10/10

Rt Hon Dame Rosie Winterton MP full year 10/10

Ian Ailles; Director General of the House of Commons (by virtue of office) full year 9/10

Sir David Natzler KCB; Clerk of the House (by virtue of office) until 28 February 2019 9/10

Dr John Benger; Clerk of the House (by virtue of office) from 1 March 2019 No meetings

Dame Janet Gaymer,7 external member8 until 31 September 2018 4/4

Dr Rima Makarem,9 external member from 1 October 2018 6/6

Jane McCall,10 external member full year 10/10

Since the end of the 2018-19 financial year, there have been two changes to the membership of the House of Commons Commission. On 15 May 2019, Pete Wishart MP was appointed in place of Stewart Hosie MP. On 23 May 2019, The Rt Hon Mel Stride became a member, on his appointment as Leader of the House of Commons, in place of The Rt Hon Andrea Leadsom MP.

7 Dame Janet Gaymer was the Chair of the House of Commons Administration Estimate Audit and Risk Assurance Committee until 31 September 2018. 8 External members are not voting members of the House of Commons Commission. 9 Dr Rima Makarem was the Chair of the House of Commons Administration Estimate Audit and Risk Assurance Committee from 1 October 2018 10 Jane McCall chaired the Commission meeting on 24 October 2018.

66 Accountability Report Annual Report of the House of Commons Commission

The Commission met 10 times during the 2018–19 financial year. Minutes of Commission meetings – the ‘Decisions’ – are published on its pages on the Parliament website. During the period covered by this report the Commission dealt with a range of administrative and financial matters including:

•• Endorsing the awarding of contracts required to •• Endorsing the design vision for the give effect to the Bullying and Harassment and Northern Estate Programme (NEP). Sexual Misconduct policies upon their adoption •• Subsequently endorsing the plans for a by the House in July 2018; and supporting the coherent design across the entirety of the application of those policies to House staff. Northern Estate during R&R decant, including •• Agreeing the establishment of an independent expanding the scope of the NEP. six-month review of the Independent Complaints •• Agreeing the appointment of the Chair and and Grievance Scheme (ICGS), supported by an membership of the R&R shadow Sponsor Board. advisory review panel. •• Endorsing the governance arrangements for In response to the report by Dame Laura Cox •• the R&R Programme during the shadow phase. into the bullying and harassment of House staff, terminating the Valuing Others Policy and •• Endorsing a strategy for reducing suspending operation of the Respect Policy single-use plastics. pending its termination by the House. •• Extending the pilot of the Parliament •• Supporting the implementation of the two Work+Family contract. other principal recommendations of Dame •• Agreeing a revised alcohol policy. Laura Cox’s report: effective access to the ICGS for people with non-recent complaints; and •• Approving a revised Guide for Members the determination of complaints without the of Delegations. involvement of MPs. •• Agreeing Votes on Account and Estimates •• Agreeing the Diversity and Inclusion Strategy for 2019–20. for 2019-22. •• Agreeing the Supplementary Estimate for •• Agreeing the mandate for the Restoration the Administration Estimate 2018–19. and Renewal of the Palace of Westminster •• Agreeing the financial remit and the pay (R&R) Programme. remit for 2019–20. •• Endorsing in principle, the eventual transfer of the Northern Estate Programme from the control of the House of Commons Commission to the Sponsor Board and Delivery Authority, subject to the agreement of the House of Lords Commission and the two bodies.

Annual Report and Accounts 2018-19 67 68 Accountability Report Commons Executive Board The management of the House Service and its operations is delegated by the Commission through an Instrument of Delegation to the Commons Executive Board. The membership of the CEB from 1 April 2018 to 31 March 2019 was:

Name Served Attendance Ian Ailles, Director-General (Chair) full year 22/25

Carlos Bamford, Managing Director, In-House Services full year 22/25

Myfanwy Barrett, Managing Director of Corporate Services and Director of Finance full year 24/25 John Benger, Clerk Assistant and Managing Director, Chamber and Committees full year 17/25 (until 28 February 2019); Clerk of the House (by virtue of office) (from 1 March 2019) Paul Evans, Acting Managing Director, Chamber and Committees from 1 March 2019 3/3

David Hemming, Interim Managing Director, Strategic Estates from 14 November 2018 9/10

Eric Hepburn, Director of Security for Parliament full year 20/25

Tracey Jessup, Director of the Parliamentary Digital Service full year 17/25

Sir David Natzler KCB, Clerk of the House (by virtue of office) until 28 February 2019 16/22 Penny Young, Librarian and Managing Director, Research and Information full year 22/25 and Participation

Since the end of the financial year 2018/19 there have Further to these changes, in February 2019 Julie been a number of changes of personnel at senior Harding took up her role as Independent Director – management level, which have resulted in changes Cultural Transformation. She is leading cultural change to the composition of the CEB. There has also been a in the Commons, translating the recommendations change in department, as prior to the departure of from the report into bullying and harassment of House Myfanwy Barrett, a short consultation exercise took of Commons staff by Dame Laura Cox into tangible, place and it was agreed that the role of Managing measurable and lasting change; and holding the CEB Director of Corporate Services should be split. In May, to account for delivering this change. Mostaque Ahmed was appointed as the new Finance Director and Managing Director of the Finance, Portfolio & Performance Team, and Mandy Eddolls was appointed as Managing Director of the Human Resources and Diversity Team.

Annual Report and Accounts 2018-19 69 The Clerk is Accounting Officer, Corporate Officer and by virtue of running a Team or functional area. It is also Data Controller, and responsible for ensuring proper committed to working in partnership with the House stewardship of resources and for maintaining an of Lords Management Board. appropriate system of internal controls. He issues a delegation letter to the Director General, who issues During the year, and in light of the Cox Report, the CEB a further delegation letter to the heads of each Team began a process of 360-degree reporting, in order to of the House on appointment, and they receive an reflect on themselves individually and as a Board. It has annual budget letter. The heads of each Team submit also reviewed its composition and working methods to the Clerk an annual letter of assurance, setting in order to work more effectively. This resulted in the out how they have ensured the effective and efficient decision to offer a standing invitation to additional management of the responsibilities delegated to them attendees to the CEB since May 2019, as described and their Team. above. Furthermore, in addition to its meetings throughout the year, the Board held away days in The CEB provides leadership for the House of Commons April and October 2018 and March 2019, where Service. It acts as a sub-committee of the Commission it considered its effectiveness. and is accountable to it. Its responsibilities are: Decisions of the Commons Executive Board are •• To assist the Commission in setting strategic available on the UK Parliament website. 11 objectives for the House of Commons Service, and to be accountable to the Commission for Sub-groups of the Commons Executive Board the delivery of the strategy. The Commons Executive Board has eight sub-boards, •• To assist the Finance Committee in the six of which are bicameral (with the House of Lords). preparation of the Estimates and of other papers Powers are delegated to these groups, and, where relating to those Votes, before their submission necessary, decisions are referred from the groups to the House of Commons Commission; and to to the CEB: carry out such other functions relating to the expenditure on the administration of House of Bicameral Commons services as may from time to time be allocated to it by the Commission. •• The Business Resilience Group directs and •• To fulfil the statutory responsibilities delegated reviews business resilience policy, strategy to it by the House of Commons Commission in and implementation across both Houses. relation to the employment of House staff. Chair: Managing Director, In-House Services, House of Commons. •• To direct the House of Commons Administration, deciding policy and operational issues as •• The Digital Strategy Board is responsible for delegated to it by the Commission, the Speaker monitoring the delivery of the Digital Strategy for or the Clerk, managing performance KPIs and Parliament. It supports the work of the Digital driving efficient use of resources. Service, in ensuring that digital delivery is at the forefront of Parliament’s work. Chair: Clerk of the •• To provide assurance to the Administration Parliaments, House of Lords. Estimate Audit and Risk Assurance Committee on the management and mitigation of risk. •• The Information Authority’s objective is to deliver increased benefits from parliamentary •• To support the Clerk in the exercise of his/her information for members of both Houses, responsibilities as Corporate Officer, Accounting staff and the public, while containing the risk Officer and Head of the House of Commons of inappropriate access to that information. Service, and to support the Director General in The Information Authority provides a focus for the exercise of his/her responsibilities. informed decision making about the effective management and security of our information. The CEB is committed to creating a unified House Joint Chairs: Senior Information Risk Owner, Service, listening to staff and involving senior leaders House of Lords and Senior Information Risk through the Strategy Delivery Group and the Commons Owner, House of Commons. Leadership Forum. Its members are not simply there

11 www.parliament.uk/mps-lords-and-offices/offices/commons/the-board/board-decisions/ceb-decisions/

70 Accountability Report •• The Joint Investment Board helps to develop The House has a system of risk management which is the Medium Term Investment Plan and monitors reviewed annually by Internal Audit. Under the current delivery of major investment programmes. Chair: governance arrangements for risk management, the Director General, House of Commons. House of Commons Commission is responsible for the strategic overview of the House of Common’s risk •• The Parliamentary Safety Assurance Board management system, which includes oversight and provides leadership and oversight of fire and review of the principal risks. 12 safety management. Joint Chairs: Director of Facilities, House of Lords, and Head of the The CEB is responsible for the management and Governance Office, House of Commons. mitigation of risk, and for providing assurance to the •• The Parliamentary Safeguarding Board, which Commission and the AEARAC on how the organisation is ensures that appropriate safeguarding practices managing its risks. In July 2018, the Commons Executive and procedures are in place for the young people Board: Risk Oversight Committee (CEB:ROC) was formed and vulnerable adults who visit Parliament or which mirrors the CEB; its primary purpose is to oversee who engage with Parliament through outreach the risk management process across the House of activities. Chair: Clerk Assistant, House of Lords. Commons including managing the House of Commons Principal Risk register. The risk register is collectively Commons only owned by the Committee with each risk being allocated to a member of the Committee to review on a quarterly •• The Senior Remuneration Committee, basis. The Committee met in July and October 2018, which makes recommendations to the Clerk and January 2019. Outside of the quarterly meetings, of the House on pay for staff in the Senior the Risk Management Team undertake deep dive work Commons Service (House of Commons and in relation to principal risks and functional team risk Digital Service only). Chair: Bronwen Curtis CBE registers, and facilitate risk workshops to discuss risk (external appointment). management processes at a team level.

•• The Risk Oversight Committee, which oversees The Principal Risk register captures the risks that the risk management process across the House impact on our strategic objectives. In April 2018 the of Commons and operational responsibility for CEB reviewed its risks holistically to ensure they managing the House of Commons Principal remained aligned to our Corporate Strategy. The Risk Register. It is responsible for maintaining a CEB: ROC continued to monitor them during the year, strategic approach to risk management across regularly ‘horizon scanning’ to ensure that any areas of the organisation, ensuring that the approach is concern which may affect or impact upon the delivery pro-active. The Committee is also responsible of the corporate strategy were identified. This work for the overall co-ordination of risk management resulted in three new risks being added: that the House activity. It is comprised of all members authorities fail to respond appropriately to the Cox of the CEB. Chair: Director General, House Report on bullying and harassment; that the House of Commons. Service fails to manage the pace or impact of change across the business; and that a breach of security System of internal controls causes harm to people or the parliamentary estate, As Accounting Officer, this governance statement or serious disruption to parliamentary business. represents my assurance that I am satisfied that the The Committee also continued to work on improving organisation’s system of internal control is effective. our risk appetite statements. The top ten 2018-19 House of Commons Principal risks (as at 31 March 2019) The House Service has policies and procedures that were as follows: underpin its governance arrangements. These include rules and guidance on finance and procurement, a Staff Handbook which sets out HR policies and practices and a mandated system of risk management. All managers are required to be familiar with, promote and comply with these policies and procedures.

12 Principal risks are those risks that are either immediate impact risks to the organisation’s ability to continue operating e.g. loss of customer data, or slow-burning risks that grow and eventually prevent delivery of objectives e.g. staff turnover or leadership capability. Management of Risk in Government – January 17 page 7. Annual Report and Accounts 2018-19 71 House of Commons Principal Risk Register Risk Category Risk Description Key actions and issues in year Security Breach of security causing, or likely to cause, We have continued to improve all aspects of harm to people or the parliamentary estate, or security at Parliament. We have also reviewed serious disruption to parliamentary business. the scope of our security risk, to ensure that it accurately reflects the essential services provided by the Parliamentary Security Department as well as the need to support an open and inclusive Parliament.

Cyber Security Cyber-attack against parliamentary systems With the expert support of the Parliamentary causes serious disruption to the strategic plan Digital Service, we are continuing to reduce objectives and to the work of Members and Parliament’s vulnerability to cyber-attack. The their staff. Cyber Security Programme successfully closed in March 2019.

Programme As a result of a loss of momentum across During 2018-19, we established a Shadow the various strands of the Restoration and Sponsor Board for the Restoration and Renewal Renewal Programme and the Northern Estate Programme. The legislation to create the Programme work before the transfer of the statutory bodies that will deliver this hugely Parliamentary Estate to the delivery authority, important programme is currently progressing the House Service has to deal with a failure through Parliament. of critical services while still in the Palace of Westminster and continuing to occupy other buildings including Portcullis House.

People Failure by the House authorities to respond We have taken some important first appropriately to the Cox Report on bullying steps to implement Dame Laura Cox’s and harassment and that any Management recommendations. These have included responses to the Report are viewed as partial appointing a new Independent Director – and inadequate. This results in a further Cultural Transformation and introducing diminution of the House’s reputation and new policies and training to help change weakens the trust that exists between the our corporate culture. House authorities and staff.

Change The House Service fails to manage the pace As our physical environment changes due or impact of change across the business and to major works taking place across the this affects the ability of staff to deliver their Parliamentary Estate, we are creating core work and prevents the organisation flexible ways for our staff to work, supported from delivering its strategic goals. by appropriate technology. We are also communicating proactively with staff, to keep them updated about impending office moves brought about by these works.

72 Accountability Report Digital The House Service cannot provide resilient Our colleagues in the Parliamentary Digital and evolving digital services to optimise Service have reviewed the scope of this risk, the efficiency and effectiveness of Members to ensure that it accurately reflects the various and staff. challenges facing the House around provision of essential digital services and support.

HR The House Service does not have the right We are committed to providing a positive and people capability or capacity to deliver its inclusive working environment, where all staff strategic goals. members are valued. To support this important goal, we have a robust People strategy in place and we have launched a new Diversity and Inclusion strategy.

Information The House fails to comply with data regulations Our Information Authority has boosted its and manage, protect or exploit its information resources and strengthened its performance. adequately. We have completed a programme to support House Service staff around the introduction of GDPR, and are providing ongoing support to Members regarding this important new regulation.

Safety Failure to comply with health and safety In response to the substantial increase requirements and successfully embed a in construction work taking place across positive safety culture across the estate. the Parliamentary Estate, we have put new measures in place to create a culture of effective safety risk management across the House Service. These include a new Health and Safety Culture Strategy, and the creation of a Safety Culture of Excellence which provides guidance and disseminates best practice.

Reputation The House suffers a loss of reputation, at least in The way we are perceived as an organisation part through the action or inaction of House staff has a broad range of ramifications for the (including poor levels of performance), Members House of Commons. We continue to take or their staff. proactive steps to protect and enhance the House’s reputation, including appointing new Directors of Communications in September 2018.

Annual Report and Accounts 2018-19 73 The Administration Estimate Audit and Risk Assurance The Head of Internal Audit concluded in his annual Committee is responsible, under their terms of report and opinion that the governance, risk reference, for reviewing governance, and the systems management, and control (GRC) processes in place are and processes by which risk management and internal generally adequate for the purposes of the House of control are undertaken by the House Service and for Commons and are operating effectively, but that some providing assurance to the Commission that risk is improvements are required to enhance the adequacy being managed effectively by the organisation. and effectiveness of the framework. Therefore, the level of assurance that he can offer is a Moderate one. Review of effectiveness The information available, including the majority of internal audit reports, support this view. Furthermore, The evidence base in previous years, concerns over the effectiveness As Accounting Officer, I have responsibility for reviewing and maturity of the risk management framework the effectiveness of the system of Internal Controls. had contributed to Limited opinions. This year an In order to undertake this review, I have obtained independent review of the effectiveness of the risk evidence of the organisation’s effectiveness through a management programme was conducted by RSM, the variety of means. The most important are: the annual third-party co-source provider. Their report provided letters of assurance from each Head of Team and a Moderate level of assurance, which contributes to the Parliamentary Digital Service; separate letters of the overall opinion. A Moderate opinion does not imply assurance on security, on information security (from that there are no significant issues or risks facing the the Information Authority), on business resilience organisation nor diminish the importance and necessity (from the Business Resilience Group), on projects and of action to be taken by management to mitigate programmes (from the Joint Investment Board), and them. Throughout 2018/19 several issues and risks on health and safety (from the Parliamentary Safety have emerged, and those of significant concern are Assurance Board); the Director of Internal Audit’s set out below. In any year risk and issues will emerge, annual report and opinion; advice and reports from and in relation to assessing the robustness of the GRC the Administration Estimate Audit and Risk Assurance framework it is the extent to which management have Committee; and reports from the external auditor, been able to identify and respond to them that is the the Comptroller and Auditor General. The letters from key consideration. Heads of Team were subject to internal challenge and review by the Governance Office and the Corporate Significant issues Services team. In addition, account has been taken of the monthly corporate performance and risk reports Bullying and harassment in the House of Commons and the information gathered from detailed feedback During the course of the year, the House of Commons interviews with both Members and Members’ staff. has been addressing a number of issues in relation to bullying and harassment and sexual harassment. The majority of this Governance Statement relates to This followed news reports in March 2018 of serious a period when I was not the Accounting Officer. My allegations made against some MPs by members of predecessor, Sir David Natzler, retired on 28 February House staff, the publication of Dame Laura Cox’s report 2019. Prior to being appointed Clerk of the House, on the bullying and harassment of House of Commons I was the Clerk Assistant and Managing Director of the staff, and the findings of our staff survey. More details Chamber and Committees Team. I was a member of about the issues that have arisen, and the important the CEB throughout the reporting year. In addition, in first steps that have been taken to address these are the period between my appointment and Sir David’s set out on page 14. retirement, I met with him and with the Head of Internal Audit and received appropriate assurances Bullying and harassment have no place in the House that the system of internal controls was sound and of Commons. The events of 2018 illustrated that while effective prior to my appointment as Accounting Officer. we all agreed with that in principle, the culture in the Therefore, I consider that I have sufficient knowledge House Service had not protected and supported staff and have had sufficient involvement to in the way that it should have. Changing this is a top take responsibility for this statement. priority for me and for every member of the Commons Executive Board.

We recognise that progress on some of these issues has been slow, but successfully grappling with issues of misconduct will require more than just developing policies and procedures, considerable though that challenge is.

74 Accountability Report Changing the culture that supports these policies – Director of Strategic Estates that progress has been shifting our mindset so that bullying and harassment made in the following areas: a paucity of effective is no longer tolerated in practice as well as in theory pre-tender survey work; overly optimistic forecasting – is a longer, more complicated task. We know that of both time and cost; issues surrounding governance it will need time to get it right. In order to do so, the and control as projects progress; a high rate of staff House Service has also appointed an Independent turnover within Strategic Estates; some difficulties with Director for Cultural Transformation, whose role is external contractors; and an inability to avoid repeating to translate the recommendations we have received past mistakes. A paper was produced in response, into tangible, meaningful and lasting change. I have which addressed the concerns raised and outlined the asked the Internal Audit Team to review progress in this actions taken. This was presented to the AEARAC on the area as part of the 2019-20 audit plan, so I can receive 1 May 2019, and it was considered that some assurance assurance that we are taking steps in the right direction. could be given that improvement work had been undertaken and that progress had been made. I have While driving forward these changes, we also cannot also taken assurance from the Restoration and Renewal lose sight of the absolute necessity of providing the best Integrated Assurance Group quarterly reports, the most support to any staff affected. recent of which gives a moderate opinion.

Safety management This is an area of concern, and given the importance of the work being conducted by Strategic Estates it is Safety management remains an area of concern. crucial that issues relating to the control environment The Parliamentary Safety Assurance Statement for are resolved as soon as possible. While there are 2018-19 concludes that overall there is limited assurance some signs of improvement, it is my view that this has that all Teams and Offices comply with the Combined not been to the desired level. In the coming year it is Safety Policy, or that commitments under the policy critical that I receive independent assurance that these are being correctly discharged in relation to low concerns are being addressed. Some steps have been frequency, high impact risks. Given the current and taken in this area, with two relevant audits in progress. future challenges relating to the physical infrastructure I have also asked the Internal Audit Team to conduct an of the estate, this risk will remain a significant feature audit of the control environment within Strategic Estates of the overall portfolio of risk for the foreseeable at an early stage within the 2019-20 audit plan. future. The Parliamentary Safety Assurance Board are seeking to drive improvements, particularly with Conclusion respect to construction safety, so that a moderate rating is achieved next year. In addition, while all of The work undertaken over a number of years, and the significant actions raised in the internal audit of particularly since the report of the House of Commons Health and Safety Compliance within the Parliamentary Governance Committee, has improved our governance, Maintenance Service Team have now been closed, it risk management, and control framework. There were is recognised that it will take time for the necessary indications that improvement was being made last year, cultural change to become embedded. A follow-up and we are now seeing the results of the further bedding internal audit in this area is planned for later in the year. down of governance arrangements and controls. There is still more to be done, on which work is in hand, and we Construction projects and programmes must not allow complacency to set in. We must strive to maintain and improve this level, and not to fall back in There is concern as to the adequacy and effectiveness the coming years. There will continue to be areas of risk of the Governance, Risk Management, and Control to manage, including our response to the Cox Report and framework within Strategic Estates and the potential making further progress on the Restoration and Renewal risk this poses to key programmes such as Restoration of the Palace of Westminster. And there will continue and Renewal Programme and the Northern Estate to be high demand on our business as usual activity, Programme. The volume of overdue audit actions, particularly as the UK’s future relationship with the recurrence of themes in internal audits across a number European Union remains unclear and the proceedings of of projects and specific issues relating to individual the House of Commons continues to attract national and projects has contributed to this concern. international attention. The governance arrangements in place have in general allowed me to assure myself of There have not been any recent internal audit reports the House’s performance, risk management and internal covering Strategic Estates, which would provide me controls, and I am satisfied that the mechanisms in place with a degree of independent assurance that progress to manage risks are adequate. has been made, which is a concern. However, the issues John Benger in this area were taken up by the Chairs of the House Accounting Officer of Commons AEARAC and the House of Lords Audit Committee. They sought assurance from the Managing 9 July 2019 Annual Report and Accounts 2018-19 75 Remuneration and Staff Report Remuneration (salary, benefits in kind and pensions) Commission external members This section of the report sets out the financial information and commentary about the Commons The Commission is supported by two external members Executive Board and staff pay for the year ended who receive remuneration for their services as follows: 31 March 2019. a) Remuneration policy External members Salary The House of Commons Commission has delegated (£’000) to the Clerk of the House responsibility for ensuring 2018-19 2017-18 that staff complement, grading, pay and conditions of service of staff are broadly in line with those of the J Gaymer DBE 10-15 25-30 (until 30 September 2018) (25-30 FYE) Home Civil Service. The House operates three separate pay structures; Senior Commons Structure (SCS, in line R Makarem 10-15 – with Senior Civil Service grades); Catering Staff; and the (from 1 October 2018) (30-35 FYE) remaining staff of the House (A-E grades). There is also J McCall 20-25 15-20 a separate pay structure for former Metropolitan Police Figures in table have been subject to audit staff (MPS) that transferred into the House of Commons Service in April 2016. The House of Commons is an accredited London Living Wage employer. The external members do not receive any bonus payments, benefits-in-kind or pension benefits. The pay award from 2018-19 consisted of two elements: an interim pay award of 1% to all pay groups with effect from 1st April 2018; and a second award from 1st September 2018 (1st August 2018 for former MPS staff) that included some changes to legacy pay arrangements. For all pay groups the emphasis was on increasing the value of the steps (revalorisation) rather than moving eligible staff to the next step in the pay scale (full step progression). Those in the Senior Commons Structure received consolidated awards ranging from 1.5 to 3%, the vast majority receiving increases of 2.75% overall. In addition, SCS staff were also able to benefit from a system of additional performance awards, that are one-off payments and not consolidated as part of an individual’s future salary entitlement, if the Remuneration Committee considers that they meet the criteria. Those that met the criteria were paid a one-off payment of £7,000, pro-rata for those that had been in post for less than a year.

The majority of staff in A-E pay bands and in the Metropolitan Police Service (TMPS) group received increases ranging between 2.75 and 3%. A number of staff received higher awards, either because they were in a fast stream role or as a result of structural changes to the pay system. Staff in Catering pay bands received an overall consolidated pay award of 3%.

76 Accountability Report Commons Executive Board The salary and benefits in kind of members of the Commons Executive Board were:

Officials Salary (a) Bonus Payments Benefits in kind (b) Pension benefits14 Total (£’000) (£’000) (nearest £100) (£’000) (£’000)

2018–19 2017–18 2018–19 2017–18 2018–19 2017–18 2018–19 2017–18 2018–19 2017–18

D Natzler, KCB 170-175 180-185 –– 16.3 16.2 25.0 (5) 210-215 190-195 (until 28 (185-190 February 2019) FYE) J Benger 130-135 125-130 –––– 70 6 200-205 130-135

I Ailles (c) 165-170 160-165 –––––– 165-170 160-165

M Barrett (d) 125-130 120-125 –––– 18.6 18.2 140-145 140-145

C. Bamford (d) 105-110 105-110 – 0-5 –– 19.3 18.8 125-130 125-130

P Evans 5-10 –––––-– 5-10 – (from 1 (115-120 March 2019) FYE)

B Finnimore – 90-95 ––––– 36 – 125-130 (until 31 March 2018)

R Greig (e) – 50-55 ––––– 21 – 70-75 (until 8 (120-125 September 2017) FYE) D Hemming 40-45 ––––– 15 – 55-60 – (from 14 (105-110 November 2018) FYE) E Hepburn 105-110 105-110 – 0-5 –– 40 9 145-150 115-120

T Jessup (e) 105-110 50-55 –––– 106 49 210-215 100-105 (from 9 (95-100 September 2017) FYE) P Young 125-130 120-125 –––– 49 48 170-175 170-175

L Bridges – 50-55 ––––– 20 – 70-75 (until 30 (75-80 November 2017) FYE) M Cwynarski – 50-55 ––––– 25 – 75-80 (until 30 (80-85 November 2017) FYE) P Richards – 45-50 ––––– 19 – 65-70 (until 30 (70-75 November 2017) FYE) A Toft – 40-45 ––––– 39 – 80-85 (until 30 (65-70 November 2017) FYE) E Watchorn – 45-50 ––––– 26 – 70-75 (until 30 (70-75 November 2017) FYE)

Figures in table have been subjected to audit

13 The value of pension benefits accrued during the year is calculated as the real increase in pension multiplied by 20, plus the real increase in any lump sum, less the contributions made by the individual. The real increases exclude adjustments due to inflation or the transfer of pension rights. Annual Report and Accounts 2018-19 77 (a) Salary includes gross salary and allowances. Fair Pay Disclosure Reporting bodies are required to disclose the (b) Benefits in kind: The monetary value covers any relationship between the remuneration of the highest- benefits provided by the House and treated by HM paid employee in their organisation and the median Revenue and Customs as a taxable emolument. remuneration of the organisation’s workforce. These figures represent the benefit from the official residences that officers are required to use in the The following table shows the ratio of the median of course of their duties. all House staff remuneration compared to the highest paid employee: (c) I Ailles has opted out of the Civil Service pension arrangements. 2018-19 2017-18 Highest earner’s total 195-200 195-200 (d) Two board members, M Barrett and C Bamford, have remuneration (£000) opted to have partnership pensions rather than joining the Civil Service Pension Scheme. The figures shown Median of total 32,183 30,772 remuneration (£) under pension benefits are the employer’s contributions. Ratio 6.14 6.42 (e) The salary and pension benefits for the Managing Figures in table have been subject to audit Director of the Parliamentary Digital Service are paid directly by the House of Commons; 30% of the Total remuneration includes annualised salary, costs are recharged to the House of Lords. The salary non-consolidated performance-related pay and and pension benefits disclosed represent the total benefits-in-kind. It does not include severance remuneration package paid between the two Houses. payments, employer pension contributions and the cash equivalent transfer value of pensions.

In 2018-19, one employee’s total remuneration was more than the highest paid member of the Commons Executive Board (2017-18: none). Total remuneration ranged from £4,000 to £200,000 (2017-18: £3,000 to £200,000).

78 Accountability Report Pension benefits (audited) The pension entitlements for the members of the Commons Executive Board, covering the period during which they were on the Board, were as follows (for 2017-18 figures, see House of Commons Annual Accounts, HC 1381):

Accrued pension Real increase in CETV CETV Real and related lump pension and related at at increase sum at 31/3/19 lump sum at 31/3/19 31/3/19 31/3/1815 In CETV (£000) (£000) (£000) (£000) (£000)

J Benger 50-55 plus a lump 2.5-5 plus a lump 1,307 1,127 73 sum of 160-165 sum of 10-12.5 D Hemming 0-5 0-2.5 45 35 7 (from 14 November 2018) E Hepburn 45-50 plus a lump 2.5-5 plus a lump 1,018 873 41 sum of 15-20 sum of 0.25 T Jessup 25-30 plus a lump 5-7.5 plus a lump 397 282 58 (from 9 September 2017) sum of 60-65 sum of 7.5-10 P Young 10-15 2.5-5 157 105 31

Figures in table have been subject to audit

Civil Service Pensions Pension benefits are provided through the Civil Service These statutory arrangements are unfunded with the pension arrangements. From 1 April 2015 a new pension cost of benefits met by monies voted by Parliament each scheme for civil servants was introduced – the Civil year. Pensions payable under classic, premium, classic Servants and Others Pension Scheme or alpha, which plus, nuvos and alpha are increased annually in line provides benefits on a career average basis with a with Pensions Increase legislation. Existing members normal pension age equal to the member’s State of the PCSPS who were within 10 years of their normal Pension Age (or 65 if higher). From that date all newly pension age on 1 April 2012 remained in the PCSPS after appointed civil servants and the majority of those 1 April 2015. Those who were between 10 years and 13 already in service joined alpha. Prior to that date, years and 5 months from their normal pension age on civil servants participated in the Principal Civil Service 1 April 2012 will switch into alpha sometime between Pension Scheme (PCSPS). The PCSPS has four sections: 1 June 2015 and 1 February 2022. All members who three providing benefits on a final salary basis (classic, switch to alpha have their PCSPS benefits ‘banked’, premium or classic plus) with a normal pension age of with those with earlier benefits in one of the final salary 60; and one providing benefits on a whole career basis sections of the PCSPS having those benefits based on (nuvos) with a normal pension age of 65. their final salary when they leave alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the member has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the two schemes.) 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).

14 The figures may be different from the closing figures in the 2017-18 Annual Accounts due to the Cash Equivalent Transfer Values (CETV) factors being updated to comply with the Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008.

Annual Report and Accounts 2018-19 79 Employee contributions are salary-related and range Further details about the Civil Service pension between 4.6% and 8.05% for members of classic, arrangements can be found at the website premium, classic plus, nuvos and alpha. Benefits in www.civilservicepensionscheme.org.uk classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump Cash Equivalent Transfer Values sum equivalent to three years initial pension is payable A Cash Equivalent Transfer Value (CETV) is the on retirement. For premium, benefits accrue at the rate actuarially assessed capitalised value of the pension of 1/60th of final pensionable earnings for each year scheme benefits accrued by a member at a particular of service. Unlike classic, there is no automatic lump point in time. The benefits valued are the member’s sum. Classic plus is essentially a hybrid with benefits accrued benefits and any contingent spouse’s pension for service before 1 October 2002 calculated broadly as payable from the scheme. A CETV is a payment made per classic and benefits for service from October 2002 by a pension scheme or arrangement to secure pension worked out as in premium. In nuvos a member builds up benefits in another pension scheme or arrangement a pension based on their pensionable earnings during when the member leaves a scheme and chooses to their period of scheme membership. At the end of the transfer the benefits accrued in their former scheme. scheme year (31 March) the member’s earned pension The pension figures shown relate to the benefits that account is credited with 2.3% of their pensionable the individual has accrued as a consequence of their earnings in that scheme year and the accrued pension total membership of the pension scheme, not just their is uprated in line with Pensions Increase legislation. service in a senior capacity to which disclosure applies. Benefits in alpha build up in a similar way to nuvos, except that the accrual rate is 2.32%. In all cases The figures include the value of any pension benefit in members may opt to give up (commute) pension for a another scheme or arrangement which the member has lump sum up to the limits set by the Finance Act 2004. transferred to the Civil Service pension arrangements. They also include any additional pension benefit The partnership pension account is a stakeholder accrued to the member as a result of their buying pension arrangement. The employer makes a basic additional pension benefits at their own cost. CETVs contribution of between 8% and 14.75% (depending are worked out in accordance with The Occupational on the age of the member) into a stakeholder Pension Schemes (Transfer Values) (Amendment) pension product chosen by the employee from a Regulations 2008 and do not take account of any panel of providers. The employee does not have to actual or potential reduction to benefits resulting contribute, but where they do make contributions, from Lifetime Allowance Tax which may be due the employer will match these up to a limit of 3% of when pension benefits are taken. pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.5% Real increase in CETV of pensionable salary to cover the cost of centrally- provided risk benefit cover (death in service and ill This reflects the increase in CETV that is funded health retirement.) by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any The accrued pension quoted is the pension the member benefits transferred from another pension scheme or is entitled to receive when they reach pension age, or arrangement) and uses common market valuation immediately on ceasing to be an active member of factors for the start and end of the period. the scheme if they are already at or over pension age. Pension age is 60 for members of classic, premium and classic plus, 65 for members of nuvos, and the higher of 65 or State Pension Age for members of alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the two schemes, but note that part of that pension may be payable from different ages.)

80 Accountability Report b) Staff Report Staff costs and related numbers The House of Commons staff costs comprise:

2018-19 2018-19 2018-19 2017-18 2017-18 2017-18 Charged Charged Charged Charged to revenue to capital to revenue to capital budgets budgets Total budgets budgets Total £000 £000 £000 £000 £000 £000 Wages and salaries 89,997 775 90,772 81,395 539 81,934 Social security costs 9,326 139 9,465 8,514 68 8,582 Other pension costs 17,196 109 17,305 15,721 76 15,797 Contributions to stakeholder pensions 345 1 346 273 11 284 Sub Total 116,864 1,024 117,888 105,903 694 106,597 Inward secondments/agency staff 9,633 2,838 12,031 8,885 1,608 10,493 Sub Total 126,497 3,422 129,919 114,788 2,302 117,090 Less recoveries in respect of outward (960) – (960) (928) – (928) secondments Total net costs 125,537 3,422 128,959 113,860 2,302 116,162 Figures in table have been subject to audit

The increase in staff costs when compared to the prior Employees can opt to open a partnership pension year can be explained by additional security staff and account, a stakeholder pension with an employer an increase in staff resources to deliver large capital contribution. Employers’ contributions of £346,400 projects and programmes. (2017-18: £283,800) were paid to one or more of a panel of three appointed stakeholder pension providers. The Principal Civil Service Pension Scheme (PCSPS) and Employer contributions are age-related and range the Civil Servants and Others Pension Scheme (CSOPS), from 8% to 14.75% of pensionable pay. Employers also known as ‘alpha’, are unfunded, multi-employer, defined match employee contributions up to 3% of pensionable benefit schemes in which the House of Commons is pay. In addition, employer contributions of £13,000 unable to identify its share of the underlying assets and (0.5%; 2017-18: £10,000, 0.5%) of pensionable pay, liabilities. The full actuarial valuation was carried out as were payable to PCSPS to cover the cost of the future at 31 March 2016. Details can be found in the resource provision of lump sum benefits on death in service and accounts of the Cabinet Office: Civil Superannuation ill health retirement of these employees. Contributions (www.civilservicepensionscheme.org.uk/about-us/ due to the partnership pension providers at the resource-accounts/). reporting period date were £nil (2017-18: £nil).

For 2018-19, employer contributions of £17,270,000 (2017-18: £15,818,000) were payable to the civil service pension schemes at one of four rates in the range 20.0 to 24.5 per cent of pensionable pay, based on salary bands. The Scheme Actuary reviews employer contributions every four years following a full scheme valuation. The contribution rates are set to meet the cost of the benefits accruing during 2018-19 to be paid when the member retires, and not the benefits paid during this period to existing pensioners.

Annual Report and Accounts 2018-19 81 Exit packages

Exit package cost Number of redundancies Number of other departures agreed

2018-19 2017-18 2018-19 2017-18 <£10,000 – – 1 39 £10,000 – £25,000 – – 2 8 £25,000 – £50,000 – – 6 5 £50,000 – £100,000 – – – 2

Total number of exit packages by type – – 9 54

Total Resource cost (£) – – 243,405 527,148

Figures in table have been subject to audit

Departure costs during 2018-19 have been calculated Staff composition in accordance with the provisions of the Civil Service The House holds information of the number of people Compensation Scheme (CSCS), a statutory scheme who have declared a non-binary gender; the figures made under the Superannuation Act 1972. Exit costs are too low to publish as it may be possible to identify are accounted for in full in the year that the departure individuals. The following table analyses the number is agreed. The House did not run a voluntary exit of people in each of the two main genders. scheme in 2018-19.

At 31 March 2019 Male Female Ill-health retirement costs are covered by the pension scheme and are not included in the table. CEB 5 4 SCS 48 34 Average number of persons employed Employees 1,520 1,231 The average number of full-time equivalent (FTE) persons employed during the year including those staff At 31 March 2018 involved in delivering shared services funded by the CEB 6 3 House of Lords, were: SCS 47 34 Employees 1,483 1,179 2018-19 2017-18 Average number (permanent staff) 2,609 2,374 Average number (agency staff) 73 57

82 Accountability Report Sickness absence data Expenditure on consultancy The recorded sickness absence figure for 2018-19 During 2018-19 £1,360,000 was incurred on consultancy stands at 5.5 average working days lost per person. costs (2017-18: £1,024,000). Consultancy costs include (2017-18: 6.6 average workings days). The Civil Service costs associated with advising or recommending figure for 2017-18 figure was 5.9 days (this is the a course of action but does not include the costs latest figure available). of implementing that advice or action. Most of the increase during the year, is due to the work undertaken Staff policies applied during the financial year on the Independent Complaints and Grievance Scheme. Candidates are asked at application stage if they require any adjustments at any stage of the recruitment Tax arrangements of Public Appointees process, for example additional time to undertake On 23 May 2012 the Treasury published Review of written tests. The House Recruitment team are the Tax Arrangements of Public Sector Appointees, responsible for ensuring that requests for adjustments and on 24 August 2012 the Cabinet Office published from candidates are managed effectively. In some the Procurement Policy Note Tax Arrangements cases, this may require liaison with the Diversity and of Public Appointees. Inclusion team and the Adjustments Officer. In addition, the House runs a ‘Recruiting for Excellence’ one day Off-payroll engagements within the Parliamentary training course which is mandatory for managers to Digital Service are reported in full in the following attend prior to recruiting new staff - this course includes tables, along with House of Commons, even though a session on diversity. The House also introduced a set their costs are shared with the House of Lords. of training requirements called ‘the essentials’, which all staff had to complete in the reporting year. These included financial training (for budget managers), diversity and inclusion training and fire safety training.

Annual Report and Accounts 2018-19 83 Table 1: For all off-payroll engagements as of 31 March 2019, for more than £245 per day and that lasted for longer than six months.

Number Existing engagements as of 31 March 2019 39 Of which at the time of reporting have existed for: less than one year 9 between one and two years 14 between two and three years 13 between three and four years – for four years or more 3

Table 2: For all new off-payroll engagements, or those that reached six months in duration, between 1 April 2018 and 31 March 2019, for more than £245 per day and that last for longer than six months.

Number New engagements, or those that reached six months in duration between 1 April 2018 and 31 March 2019 25 Of which: Number assessed as caught by IR35 – Number assessed as not caught by IR35 25 Number engaged directly (via PSC contracted to the House) – Number of engagements reassessed for consistency/assurance purposes during the year – Number of engagements that saw a change to IR35 status following the consistency review N/A

Table 3: For any off-payroll engagements of Board Members, and/or, senior officials with significant financial responsibility, between 1 April 2018 and 31 March 2019

Number Off-payroll engagements of board members, and/or senior officials with significant financial responsibility, during – the financial year. Individuals that have been deemed ‘board members, and/or senior officials with significant responsibility’, during 14 the financial year both off-payroll and on-payroll.

Of the 14 officials, 10 are members of the Commons Executive Board and 4 were senior officials (not Board members) with budgetary responsibility in excess of £10 million.

John Benger Accounting Officer

9 July 2019

84 Accountability Report 5. Parliamentary Accountability and Audit Report a) Statement of Parliamentary Supply In addition to the primary statements prepared under Figures in the area outlined in bold are voted totals or IFRS, the Financial Reporting Manual (FReM) requires other totals subject to Parliamentary control and audit. the House to prepare a Statement of Parliamentary For Estimate purposes, the House’s expenditure is Supply with supporting notes to show outturn against classified as administration except for donated assets. the Supply Estimate presented to Parliament. It further compares the outturn performance against the Department Equivalent Limit equivalent (DEL equivalent) expenditure control set by the Estimate.

Summary of Resource and Capital Outturn 2018-19

2018-19 2017-18 Estimate Outturn Outturn

Voted outturn compared with Estimate: Non- Non- saving/ Note Voted Voted Total Voted Voted Total (excess)15 Total £000 £000 £000 £000 £000 £000 £000 £000

Departmental Expenditure Limit equivalent16 Resource SoPs 1.1 302,100 – 302,100 264,204 – 264,204 37,896 228,693 Capital SoPs 1.2 154,100 – 154,100 141,504 – 141,504 12,596 194,175 Total 456,200 – 456,200 405,708 – 405,708 50,492 422,868

15 Explanations of variances between the Estimate and Outturn are provided in the Statement of Parliamentary Supply Commentary) 16 DEL equivalent represents Departmental Equivalent Limit equivalent as defined in the Main Estimate (HC 964) and Supplementary Estimate (HC 1963).

Annual Report and Accounts 2018-19 85 Net cash requirement 2018–19

2018-19 2018-19 Outturn 2017-18 Estimate Outturn compared Outturn with Estimate: Note saving/(excess) £000 £000 £000 £000 SoPS 3 393,100 346,009 47,091 275,629

Administration Costs 2018-19

2018-19 2018-19 2017-18 Note Estimate Outturn Outturn £000 £000 £000 SoPS 3 302,100 264,204 228,693

Notes to the Statement of Parliamentary Supply (SoPS) SoPS 1. Net outturn

SoPS 1.1 Analysis of net resource outturn

Estimate Outturn 2018-19 2017-18

Variance net Gross Income Net Gross Income Net Outturn Outturn to Estimate

£000 £000 £000 £000 £000 £000 £000 £000 Spending in 319,900 (17,800) 302,100 286,266 (22,062) 264,204 37,896 228,693 DEL equivalent

SoPS 1.2 Analysis of net capital outturn

Estimate Outturn 2018-19 2017-18

Variance net Gross Income Net Gross Income Net Outturn Outturn to Estimate

£000 £000 £000 £000 £000 £000 £000 £000 Spending in 154,100 – 154,100 141,504 – 141,504 12,596 194,175 DEL equivalent

86 Accountability Report SoPS 2. Reconciliation of net resource outturn to net operating expenditure

2018-19 2017-18 Outturn Outturn Note £000 £000 Total resource outturn in Statement of Parliamentary Supply SoPS 1.1 Voted 264,204 228,693 Non-Voted – – Donations classified as capital income (11) –

Net Expenditure in Statement of Comprehensive Net Expenditure 264,193 228,693

SoPS 3. Reconciliation of net resource outturn to net cash requirement

Net total outturn compared Estimate Outturn with estimate: saving/ (excess) Note £000 £000 £000 Resource Outturn SoPS 1.1 302,100 264,204 37,896

Capital Outturn SoPS 1.2 154,100 141,504 12,596

Accruals to cash adjustments: Adjustments to remove non-cash items:

Non-cash items – other administration costs 3 (63,100) (43,388) (19,712)

Adjustments to reflect movements in working balances: Increase/(decrease) in inventories 10 12 (12) Increase/(decrease) in receivables 12 (303) 303 (Increase)/decrease in payables 13 (20,575) 20,575 (Increase)/decrease in payables 13 4,334 (4,334) falling due after more than one year Use of provision 14 221 (221)

Net Cash Requirement 393,100 346,009 47,091

Annual Report and Accounts 2018-19 87 b) Statement of Parliamentary Capital Supply Commentary The House agreed an initial capital budget of £204.1 million which was reduced by £50.0 million Scope of the Estimate via the supplementary estimate to reflect changes in These accounts cover expenditure arising from general key planning assumptions affecting the Restoration administration of the House of Commons and activities and Renewal, and Northern Estate Programmes. undertaken to meet Parliament’s objectives, associated commercial activities; grants to organisations who Capital expenditure totalled £141.5 million against the promote the House of Commons’ objectives, and other total budget of £154.1 million, with the main projects non-cash costs. Income arising from rental, fees and being £24.6 million for 1 Canon Row, £15.9 million for charges in connection with activities within Parliament. fire safety works, £4.8 million for IT equipment as well as the main strategic programmes detailed in the The cost of Members’ salaries, allowances and following sections. The £12.6 million underspend is due other related expenditure is borne in the main by the to the re-scheduling of a number of the larger projects. Independent Parliamentary Standards Authority (IPSA) Estimate; a small amount of expenditure is met by the Strategic Programmes House of Commons Members Estimate. Restoration and Renewal The Joint Committee on the Palace of Westminster and Resources the Public Accounts Committee both recommended full The 2018-19 budget was the third year of the 2016- decant whilst the Palace of Westminster is restored and 21 strategy, with a key focus on delivering the House for the work to be delivered through an arm’s-length Services three objectives, whilst seeking to improve our delivery authority. This was put to both Houses during services to customers, enhance the House’s reputation, January and February 2018 and both Houses concurred ensure that we deliver value for money and use our with this approach. resources effectively, and that we have a positive impact in the work of Members. Legislation was drafted that would create the Sponsor Board and Delivery Authority (the bodies needed The House of Commons Commission agreed a resource to deliver this work) in statutory form. The draft bill budget of £319.9 million (HC 964) in April 2018. This (Parliamentary Buildings (Restoration and Renewal) was reduced by £15.0 million via supplementary Bill) was being considered by a joint select committee estimate (HC 1963) in February 2019 to reflect changes during 2018-19, however progress was not as quick as in key planning assumptions affecting the Restoration hoped. The devastating fire of Notre-Dame de Paris and Renewal, and Northern Estate Programmes and in April 2019 re-focussed attention on the condition of the impairment impact of building refurbishment. the Palace and the potential risk of something similar Forecasting building valuations continues to be happening here. At the time of writing, the legislation challenging, with the market relatively flat at the was making progress through Parliament. moment. In addition, the substantial redevelopment work on the Parliamentary Estate will continue to have Spend this year on the Restoration and Renewal a significant impact on the out-turn for years to come. programme has increased significantly compared to prior years as work begins to establish appropriate The resource budget shows an underspend of governance arrangements for the new Bodies and £37.9 million against the budget of £302.1 million. developing plans for temporary accommodation Most of this underspend is due to the expected during the decant period. revaluation and impairment adjustments arising from the refurbishment of 1 Canon Row being rescheduled into next year (£23 million). In addition, there are underspends on property costs due to rent rebates, lower utility costs and lower than expected rent increases (£8 million). Re-scheduling of works on major programmes such as Northern Estates and Restoration and Renewal also accounted for around £8.8 million of the underspend.

88 Accountability Report The contribution from the House of Commons is:

Pre 2015-16 2015-16 2016-17 2017-18 2018-19 Total £ million £ million £ million £ million £ million £ million Resource 0.4 0.8 1.3 1.8 4.0 8.3 Capital 3.2 3.8 2.7 3.9 12.0 25.6

Included in these figures are the direct costs of establishing the Shadow Sponsor Body which will take the lead on this work until the legislation is passed. The cost to the House of Commons in 2018-19 was £0.3 million resource and £0.1 million capital. Further details about the Restoration and Renewal Programme including the Shadow Sponsor Body can be found at www.restorationandrenewal.parliament.uk

Northern Estates Programme The Northern Estate Programme involves the refurbishment of four currently occupied listed buildings, Norman Shaw North, 1 Derby Gate, Norman Shaw South and 1 Parliament Street, preceded by the acquisition and refurbishment of Richmond House. Richmond House will have a key role to play in coming years, initially as decant space during works to the Northern Estate and then again during work to the Palace of Westminster.

Costs incurred on the Northern Estate Programme during 2018-19 have increased significantly compared to prior years, as design work moves to the next stage. In addition, 1 Derby Gate is fully decanted and construction work has started. The costs incurred by the House on the Northern Estates Programme is:

2015-16 2016-17 2017-18 2018-19 Total £ million £ million £ million £ million £ million Resource 0.1 3.0 0.7 0.6 4.4 Capital 1.2 6.8 13.2 44.0 65.2

Elizabeth Tower Work started early in 2017 with the erecting of scaffolding around the Elizabeth Tower to facilitate the refurbishment of this famous landmark. After nearly a year, the scaffolding construction was complete and work could start on the Tower and clock mechanism. The work has been subject to several documentaries in the past year and while the north clock face has been uncovered, trials continue to ensure the replacement glazing has the correct character and appearance.

The contribution from the House of Commons is:

2016-17 2017-18 2018-19 Total £ million £ million £ million £ million Capital 1.1 7.2 12.6 20.9

Cash Changes to key planning assumptions on the Restoration and Renewal and Northern Estate Programmes and the rescheduling of projects mentioned previously have resulted in a lower capital requirement and consequently less cash is required. The House agreed an initial cash requirement of £433.1 million for 2018-19 but this was reduced by £40.1 million to £393.1 million via the supplementary estimate.

The cash underspend of £47.1 million is driven mainly by the underspends on the resource and capital budgets (total £50.1 million) off-set by £2.7 million in working capital movements (details can be found SoPS 3: Reconciliation of net resource outturn to net cash requirement).

Annual Report and Accounts 2018-19 89 2019-20 resources b) Fees and Charges The 2019-20 Estimate has been agreed (HC 2173) and This section is subject to audit includes a resource budget of £440.5 million, capital budget of £348.5 million and a cash requirement of Fees and charges for all areas are set in accordance £633.5 million. with the House of Commons policy. Further details are available at www.parliament.uk/documents/commons- The large increase in the budgets reflects the continued finance-office/Financial-Policies/Fees-and-Charges- development of the strategic programmes highlighted policy.pdf but the main principle is that the House of previously. This has included the purchase of a property Commons is first and foremost, a working institution. on Dartmouth Street early in 2019-20, along with a While the House does receive income, predominantly number of new leases for property in the vicinity of the from catering, retail and tours, this is incidental Palace of Westminster. These acquisitions will facilitate to its core function which is to support a thriving the efficient decant of the Northern Estates to enable parliamentary democracy. refurbishment works to be undertaken. Where fees are levied, these adhere to the principles 6. Parliamentary Accountability set out in Managing Public Money and where possible, cover the direct cost of providing the service and make Disclosures a contribution towards overheads. Fees and charges a) Losses and special payments are reviewed annually. This section is subject to audit The main income streams are catering and visitor engagement activities (retail and tours). During 2018- Losses Statement 19, the House received £10.8 million income for catering (£9.7 million in 2017-18) and £3.9 million (£4.3 million 2018-19 2017-18 for 2017-18) for visitor engagement. Tours and retail are Total number of cases 30 13 expected to recover the cost of providing the service, Total value of cases (£000) 2,037 60 however during 2018-19 a number of events were cancelled at short notice to enable critical fire safety works to be undertaken and because the parliamentary Details of cases over £300,000 recess in February was also cancelled. This had a There is one case for £1.8 million in 2018-19 (2017-18: significant impact on income generation during the nil). This relates to design work undertaken in the year, consequently the cost of these services was £0.9 underground carpark area which did not fully meet the million (2017-18: £0.1 million). The cost of the catering project objectives. Project management and oversight services was £2.6 million (2017-18: £3.0 million). have been improved which should prevent this from happening in future. Income is also received from other sources such as rent from investment properties, £1.0 million Special Payments (2017-18: £0.9 million) (rents are set at market levels) and to a much lesser extent from areas such as 2018-19 2017-18 broadcasting and filming. Total number of cases 41 64 Total value of cases (£000) 1,282 533

This included one special payment which exceeded £300,000 (2017-18: nil.) which relates to a contractual dispute with a supplier. Further information can not be provided due to commercial confidentiality.

90 Accountability Report c) Remote Contingent Liabilities In my opinion: This section is subject to audit •• the financial statements give a true and In accordance with IAS 37, the House discloses for fair view of the state of the House of Commons parliamentary reporting and accountability purposes Administration’s affairs as at 31 March 2019 certain statutory and non-statutory contingent and of its net expenditure for the year then liabilities where the likelihood of a transfer of economic ended; and benefit is remote, in accordance with the HM Treasury •• the financial statements have been properly publication Managing Public Money. prepared in accordance with the Financial Reporting Manual as adapted or interpreted As at 31 March 2019 there is a remote contingent for the House of Commons context. liability relating to Works of Art on loan from various collections. Whilst there is no expectation this will be Opinion on regularity triggered, the liability is estimated at £2.3 million. In my opinion, in all material respects: (2017-18: £2.4 million). •• the Statement of Parliamentary Supply John Benger properly presents the outturn against voted Accounting Officer Parliamentary control totals for the year ended 9 July 2019 31 March 2019 and shows that those totals have not been exceeded; and 7. Certificate and Report of the •• the income and expenditure recorded in the Comptroller and Auditor General financial statements have been applied to the purposes intended by Parliament and the to the House of Commons financial transactions recorded in the financial statements conform to the authorities which Opinion on financial statements govern them. I certify that I have audited the financial statements of the House of Commons Administration for the Basis of opinions year ended 31 March 2019. The financial statements comprise: Statements of Comprehensive Net I conducted my audit in accordance with International Expenditure, Financial Position, Cash Flows, Changes Standards on Auditing (ISAs) (UK) and Practice Note in Taxpayers’ Equity and the related notes, including 10 ‘Audit of Financial Statements of Public Sector the significant accounting policies. These financial Entities in the United Kingdom’. My responsibilities statements have been prepared under the accounting under those standards are further described in the policies set out within them. Auditor’s responsibilities for the audit of the financial statements section of my certificate. Those standards require me and my staff to comply with the Financial I have also audited the Statement of Parliamentary Reporting Council’s Revised Ethical Standard 2016. I am Supply and the related notes, and the information in independent of the House of Commons Administration the Accountability Report that is described in that in accordance with the ethical requirements that are report as having been audited. relevant to my audit and the financial statements in the UK. My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Annual Report and Accounts 2018-19 91 Conclusions relating to going concern •• identify and assess the risks of material I am required to conclude on the appropriateness misstatement of the financial statements, of management’s use of the going concern basis of whether due to fraud or error, design and accounting and, based on the audit evidence obtained, perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient whether a material uncertainty exists related to events and appropriate to provide a basis for my or conditions that may cast significant doubt on the opinion. The risk of not detecting a material House of Commons Administration’s ability to continue misstatement resulting from fraud is higher as a going concern for a period of at least twelve than for one resulting from error, as fraud months from the date of approval of the financial may involve collusion, forgery, intentional statements. If I conclude that a material uncertainty omissions, misrepresentations, or the override exists, I am required to draw attention in my auditor’s of internal control. report to the related disclosures in the financial •• obtain an understanding of internal control statements or, if such disclosures are inadequate, to relevant to the audit in order to design audit modify my opinion. My conclusions are based on the procedures that are appropriate in the audit evidence obtained up to the date of my auditor’s circumstances, but not for the purpose of report. However, future events or conditions may cause expressing an opinion on the effectiveness the entity to cease to continue as a going concern. of the House of Commons Administration’s I have nothing to report in these respects. internal control. •• evaluate the appropriateness of accounting Responsibilities of the Accounting Officer for policies used and the reasonableness of the financial statements accounting estimates and related disclosures As explained more fully in the Statement of Accounting made by management. Officer’s Responsibilities, the Accounting Officer •• evaluate the overall presentation, structure and is responsible for the preparation of the financial content of the financial statements, including statements and for being satisfied that they give the disclosures, and whether the consolidated a true and fair view. financial statements represent the underlying transactions and events in a manner that Auditor’s responsibilities for the audit of the achieves fair presentation. financial statements My responsibility is to audit, certify and report on the I communicate with those charged with governance financial statements in accordance with ISAs (UK). regarding, among other matters, the planned scope and timing of the audit and significant audit findings, An audit involves obtaining evidence about the amounts including any significant deficiencies in internal control and disclosures in the financial statements sufficient to that I identify during my audit. give reasonable assurance that the financial statements are free from material misstatement, whether caused I am required to obtain evidence sufficient to by fraud or error. Reasonable assurance is a high give reasonable assurance that the Statement of level of assurance, but is not a guarantee that an Parliamentary Supply properly presents the outturn audit conducted in accordance with ISAs (UK) will against voted Parliamentary control totals and that always detect a material misstatement when it exists. those totals have not been exceeded. The voted Misstatements can arise from fraud or error and are Parliamentary control totals are Departmental considered material if, individually or in the aggregate, Expenditure Limit equivalent (Resource and Capital), they could reasonably be expected to influence the Non-Budget (Resource) and Net Cash Requirement. economic decisions of users taken on the basis of these I am also required to obtain evidence sufficient to financial statements. give reasonable assurance that the expenditure and income recorded in the financial statements have been As part of an audit in accordance with ISAs (UK), applied to the purposes intended by Parliament and I exercise professional judgment and maintain the financial transactions recorded in the financial professional scepticism throughout the audit. statements conform to the authorities which I also: govern them.

92 Accountability Report Other Information Matters on which I report by exception The Accounting Officer is responsible for the other I have nothing to report in respect of the following information. The other information comprises matters which I report to you if, in my opinion: information included in the annual report, but does not include the parts of the Accountability Report described •• adequate accounting records have not been kept in that report as having been audited, the financial or returns adequate for my audit have not been statements and my auditor’s report thereon. My opinion received from branches not visited by my staff; or on the financial statements does not cover the other •• the financial statements and the parts of the information and I do not express any form of assurance Accountability Report to be audited are not in conclusion thereon. In connection with my audit of the agreement with the accounting records and financial statements, my responsibility is to read the returns; or other information and, in doing so, consider whether the other information is materially inconsistent with the •• I have not received all of the information and financial statements or my knowledge obtained in the explanations I require for my audit; or audit or otherwise appears to be materially misstated. •• the Governance Statement does not reflect If, based on the work I have performed, I conclude compliance with HM Treasury’s guidance. that there is a material misstatement of this other information, I am required to report that fact. I have Report nothing to report in this regard. I have no observations to make on these financial statements. Opinion on other matters In my opinion: Gareth Davies •• the parts of the Accountability Report to Comptroller and Auditor General be audited have been properly prepared in National Audit Office accordance with the Financial Reporting Manual 157-197 Buckingham Palace Road as adapted or interpreted for the House of Victoria, Commons context; London, SW1W 9SP •• in the light of the knowledge and understanding of the House of Commons Administration and its Date: 15 July 2019 environment obtained in the course of the audit, I have not identified any material misstatements in the Performance Report or the Accountability Report; and •• the information given in the Performance and Accountability Reports for the financial year for which the financial statements are prepared is consistent with the financial statements.

Annual Report and Accounts 2018-19 93 Financial Statements 03

94 Financial Statements Financial Statements

Statement of Comprehensive 96 Net Expenditure Statement of Financial Position 97 Statement of Cash Flows 98 Statement of Changes to 99 Taxpayers’ Equity Notes to the Accounts 100

Annual Report and Accounts 2018-19 95 Financial Statements

Statement of Comprehensive Net Expenditure For the year ended to 31 March 2019

This account summarises the expenditure and income generated and consumed on an accruals basis. It also includes other comprehensive income and expenditure, which include changes to the values of non-current assets and other financial instruments that cannot yet be recognised as income or expenditure.

2018-19 2017-18 Note £000 £000

Income from sale of goods & services 5 (22,071) (17,510) Other operating income – – Total operating income (22,071) (17,510)

Staff costs 3 125,537 113,860 Purchase of goods & services 3 113,641 99,481 Depreciation & Impairment 3 31,732 26,828 Grants 3, 4 3,698 3,548 Other costs/(gain) 3 11,656 4,554

Total Operating expenditure 286,264 248,271 Net operating expenditure before transfer of estimate 264,193 230,761 Transfer of estimate – (2,068) Net expenditure for the year 264,193 228,693

Other comprehensive net expenditure Items which will not be reclassified to net operating expenditure: 2.1 52,665 (174,213) – revaluation of Property, Plant and Equipment

Comprehensive net expenditure for the year 316,858 54,480

96 Financial Statements Statement of Financial Position As at 31 March 2019

This statement presents the financial position of the House. It comprises three main components: assets owned or controlled; liabilities owed to other bodies; and equity, the remaining value of the entity.

31 March 2019 31 March 2018

Note £000 £000 £000 £000 Non-current assets: Property, plant and equipment 6 1,539,540 1,493,350 Intangible assets 8 542 786 Total non-current assets 1,540,082 1,494,136

Current assets: Inventories 10 600 588 Trade and other receivables 12 15,428 15,731 Cash and cash equivalents 11 2,991 1,677 Total current assets 19,019 17,996

Total assets 1,559,101 1,512,132

Current liabilities Trade and other payables 13 (73,024) (51,147) Total current liabilities (73,024) (51,147)

Total assets less current liabilities 1,486,077 1,460,985

Non-current liabilities Provisions 14 (5,224) (5,055) Finance Lease liability 13 (107,394) (111,728) Total non-current liabilities (112,618) (116,783)

Total assets less liabilities 1,373,459 1,344,202

Taxpayers’ equity and other reserves: General fund 944,641 855,960 Revaluation reserve 427,506 486,942 House of Commons Commission reserve 1,312 1,300

Total equity 1,373,459 1,344,202

John Benger Accounting Officer 9 July 2019

Annual Report and Accounts 2018-19 97 Statement of Cash Flows For year ended 31 March 2019

The Statement of Cash Flows shows the changes in cash and cash equivalents of the House during the reporting period. The statement shows how the House generates and uses cash and cash equivalents by classifying cash flows as operating, investing and financing activities. The amount of net cash flows arising from operating activities is a key indicator of service costs and the extent to which these operations are funded by way of income from the recipients of services provided by the House. Investing activities represent the extent to which cash inflows and outflows have been made for resources which are intended to contribute to the Houses’ future public service delivery. Cash flows arising from financing activities include Parliamentary Supply and other cash flows.

2018-19 2017-18 Cash flows from operating activities Note £000 £000

Net operating cost (264,193) (230,761) Adjustments for non-cash transactions 3 43,388 31,382 (Increase)/Decrease in trade and other receivables 12 303 (3,575) (Increase)/Decrease in inventories 10 (12) (106) Increase/(Decrease) in trade payables 13 20,575 10,027 Less movements in payables not passing through SCNE 9.3 (4,334) (5,272) Use of provisions 14 (221) (133) Donated Asset/Transfer of estimate17 6 (11) (16)

Net cash outflow from operating activities (204,505) (198,454)

Cash flows from investing activities Purchase of property, plant and equipment 6 (141,502) (193,778) Purchase of intangible assets 8 (4) (397)

Proceeds of disposal property, plant and equipment 2 –

Net cash outflow from investing activities (141,504) (194,175)

Cash flows from financing activities From the Consolidated Fund (Supply) – current year 347,311 272,300 Interest received on Commission Reserve Balance 12 11 Capital element of payment in respect of finance lease – 117,000 and on balance sheet (SOFP) Service concession contracts

Net financing 347,323 389,311

Net increase/(decrease) in cash and cash equivalents in the period before and after adjustment for receipts and payments to the Consolidated Fund 1,314 (3,318)

Cash and cash equivalents at the beginning of the period 11 1,677 4,995

Cash and cash equivalents at the end of the period 11 2,991 1,677

17 The transfer of estimate relates to non-cash items totalling £2,084,000. The net transfer of £2,068,000 includes cash items totalling £16,000.

98 Financial Statements Statement of Changes in Taxpayers’ Equity For the year ended 31 March 2019

This statement shows the movement in the year on the different reserves held by the House, analysed into ‘general fund reserves’ (i.e. those reserves that reflect a contribution from the Consolidated Fund). Financing and the balance from the provision of services are recorded here. The Revaluation Reserve reflects the change in asset values that have not been recognised as income or expenditure. Other earmarked reserves are shown separately where there are statutory restrictions on their use.

General Revaluation Commission Total Fund Reserve Reserve Reserves

Note £000 £000 £000 £000

Balance at 31 March 2017 801,020 320,648 1,289 1,122,957

Net Parliamentary Funding – drawn down 272,300 – – 272,300

Net Parliamentary Funding – deemed 13 3,706 – – 3,706

Supply (payable)/receivable adjustment 13 (377) – – (377)

Net Operating Cost (228,693) – – (228,693) Non-Cash Adjustments

Non-cash charges – auditor’s remuneration 3 85 – – 85 Movement in Reserves Additions – – 11 11 Recognised in Statement of Comprehensive – 174,213 – 174,213 Expenditure Transfers between reserves 7,919 (7,919) – – Balance at 31 March 2018 855,960 486,942 1,300 1,344,202

Net Parliamentary Funding – drawn down 347,311 – – 347,311 Net Parliamentary Funding – deemed 13 377 – – 377 Supply (payable)/receivable adjustment 13 (1,679) – – (1,679) Net Operating Cost (264,193) – – (264,193) Non-Cash Adjustments Non-cash charges – auditor’s remuneration 3 94 – – 94 Movement in Reserves Additions – – 12 12 Recognised in Statement of Comprehensive – (52,665) – (52,665) Expenditure Transfers between reserves 6,771 (6,771) – –

Balance at 31 March 2019 944,641 427,506 1,312 1,373,459

Annual Report and Accounts 2018-19 99 Notes to the Accounts The Parliamentary Procurement and Commercial Service (PPCS) is a shared service, operated on behalf 1. Accounting conventions of both Houses by the House of Lords. The cost of PPCS is split between the House of Commons (70%) and the 1.1 Accounting policies House of Lords (30%). These financial statements have been prepared in Arrangements for security are agreed jointly by the accordance with the Financial Reporting Manual (FReM) authorities of both Houses of Parliament with the as adapted or interpreted for the House of Commons Metropolitan Police. These costs are monitored jointly context which applies International Financial Reporting by the authorities in the two Houses but are billed Standards (IFRS). Where the FReM permits a choice individually to the House of Commons and House of of accounting policy, the policy which is judged to be Lords in a pre-determined ratio (70:30 for 2018-19). the most appropriate to give a true and fair view has The cost of the Parliamentary Security Department been selected. The policies adopted by the House of is also shared on the same ratio. Commons are described below. They have been applied consistently in dealing with items that are The management of the ICT services for both Houses considered material to the accounts. has been centralised within the Parliamentary Digital Service (PDS) (formerly Parliamentary Information In addition to the primary statements prepared under and Communications Technology (PICT) service). IFRS, the FReM also requires the House to prepare PICT (now PDS) formally became a joint department an additional primary statement. The Statement of of both Houses on 1 April 2008 under the terms of the Parliamentary Supply and supporting Notes show Parliament (Joint Departments) Act 2007. Each House outturn against Estimate in terms of the net resource pays for its own ICT hardware with the costs of shared requirement and the net cash requirement. services being split between the House of Commons (70%) and House of Lords (30%). These accounts have been prepared on the accruals basis under the historical cost accounting convention 1.3 Property, plant and equipment modified to account for the revaluation of property. In accordance with International Accounting Standards The accruals basis of accounting means reporting (IAS 16), non-specialised property assets (excluding income and expenditure when it is incurred rather the Palace of Westminster and special adaptations of than when it is received or paid. Other non-current Portcullis House) are valued at current value in existing assets are not generally re-valued unless the use (EUV) using a method determined by the Valuation adjustments are material. Office Agency (VOA). The Palace of Westminster (including the Visitor Reception Building) and 1.2 Relationship with the House of Lords special adaptations of Portcullis House are valued at The House of Commons and the House of Lords depreciated replacement cost due to their specialised hold joint stewardship of the Palace of Westminster. nature. All property is subject to a full professional Responsibility for maintenance of the Palace and valuation at least every five years. Annual interim the remaining parts of the Parliamentary Estate is reviews are undertaken to ensure that asset values shared between the Strategic Estates Team and the remain in line with their fair value. Parliamentary Maintenance Services Team which is part of In-House Services. General estates expenditure, Revaluation losses are taken first to reserves and then individual maintenance and building projects including to the Statement of Comprehensive Net Expenditure for the Curators Office are shared between the House of any loss in excess of previous revaluation gains. Commons (60%) and the House of Lords (40%) and recharged accordingly, or solely allocated to the (i) Depreciated Replacement Cost House of Commons or House of Lords. Other shared costs are split at agreed ratios for that service. Depreciated replacement cost (DRC) is used for specialised properties which are unique, either due to The Parliamentary Archives are a shared facility, their design, configuration, size or nature and are rarely operated on behalf of both Houses by the House of sold in the market. When producing a DRC valuation, Lords. The costs of the Archives are split between the the general assumption is that the replacement cost House of Commons (40%) and House of Lords (60%). is calculated using ‘a modern equivalent’, where the replacement asset provides the same service potential but in a contemporary setting. However, there are situations where the only way that a replacement asset could provide the same service potential would be to reproduce the actual building. Public Sector 100 Financial Statements Accounting Standard 17 (IPSAS 17) provides an example Functional Obsolescence factor of 1% will reduce the of a parliament building that would be reproduced net book value of the Palace by approximately £6.5 (rather than replaced) because of its significance to million (House of Commons only). the community. The Palace of Westminster is a Grade One listed building and forms part of a UNESCO World During 2018-19, management of both Houses reviewed Heritage Site, therefore it is appropriate for it to be the Functional Obsolescence factor applied to the valued on the basis of it being rebuilt ‘as is’. Palace and amended it from 8.25% to 13.3%. One component of the replacement cost (iii) Freehold properties calculation is the inflationary increase applied year on year to the cost of build – this is the Tender Price Title to freehold land and buildings is held as follows: Index (TPI). There is also a location factor for the •• The Palace of Westminster by the Sovereign. London Borough of Westminster. These indices are estimates and are therefore subject to fluctuations, for •• Property on the House of Commons part of the example, a one point movement in the TPI would have Parliamentary Estate by the Corporate Officer of approximately £1 million impact on the DRC valuation of the House of Commons (the Clerk of the House). the Palace of Westminster as a whole. The VOA provide a draft valuation in the Autumn preceding the year end Non-specialised buildings (i.e offices) are valued on using the forecast TPI and location indices. The VOA an Existing Use Value (EUV) basis. The whole of the then monitor these indices throughout the remainder Parliamentary Estate was re-valued in full by the VOA of the year and notify the House of significant as at 31 March 2018. fluctuations, say over 3% for both Houses to review and assess the impact. Change in Accounting Estimate There has been a change in accounting estimate The VAT position of the House is complex and there with respect to the valuation of Portcullis House. The are no comparators for the total rebuild of an asset valuation in the 2018-19 accounts used a different basis of such unique and historic importance. The most to that used for valuations up to 2017-18. prudent decision based on current HMRC guidelines to government departments at 31 March 2018 is that It was identified in 2017-18 that assumptions around the valuation would include VAT. The assumption will the Net Internal Area (NIA) used to value Portcullis be kept under review to reflect any future changes or House were different from those used to value the rest clarifications. The total amount of VAT recognised of the estate. The valuer advised that the basis should within the valuation is estimated to be around not be changed until all investigations to ascertain an £150 million (House of Commons only). appropriate basis had been concluded by the Valuation Office, these investigations continued during 2018-19 (ii) Functional Obsolescence and were finalised in March 2019, resulting in adoption of a common approach to NIA and a change to the Functional Obsolescence represents a reduction in the Portcullis House valuation. This has been classified as a carrying value of an asset due to an outdated design change in accounting estimate and increased the value feature that cannot easily be changed. The Palace of of the building by approximately £30 million. Westminster was designed in the mid 19th century to provide the functional requirements needed at the time (iv) Long leasehold and also incorporated surviving medieval buildings on the site, so it is not surprising that the design of the A property, 102 Rochester Row, is held on a long Palace is perhaps not the best fit to meet the needs of leasehold and valued at fair value by the VOA. the 21st century. (v) Investment properties The extent to which the value of the Palace is reduced The House of Commons holds interests in land is an Accounting Estimate and determined jointly, by and buildings which are classified as investment both Houses of Parliament. It looks at a range of factors properties with the rental income being negotiated such as the site and location of the Palace, the flow at arm’s length. All contracts are treated on an of supplies throughout the building and how energy operating lease basis. These properties are the car efficient it is. The main changes impacting the revised park at Abingdon Street, 10 and 11 Bridge Street, functional obsolescence factor are a change in relation and Units A, B and C in Portcullis House. Investment to the aspect relating to maintenance and its increased properties in 49 and 50 Parliament Street were relevance, and the reduced but still high score given subsumed into 53 Parliament Street during the to the importance of policy and how the two Houses of refurbishment of that building. Parliament interact and operate. A change in the

 Annual Report and Accounts 2018-19 101 In accordance with IAS 40 investment property is valued (x) Assets under construction (AuC) at fair value and not depreciated. A full VOA valuation is carried out at least every five years, with an annual Assets under construction are items that have yet to be interim review to ensure that asset values are in line completed and are not in operation at the end of the with their fair value. financial year (the House has yet to receive the future economic benefits of the asset). These items are valued at cost in the accounts. There is a restriction on Abingdon Street car park. Its use is restricted to that of an underground car park with public garden at ground level. 1.4 Donated assets Donated assets are capitalised at fair value with the (vi) Short, lease-hold tenant improvements credit entry made to income.

The House of Commons has a number of short, lease- Donated assets currently comprise works of art and are hold properties and undertakes tenant improvement not subject to a depreciation charge in line with House works. These are capitalised at cost and depreciated policy on works of art. over the remaining life of the lease. The VOA does not include these in their annual valuation. 1.5 Heritage Assets The FReM requires organisations to provide additional (vii) Finance Lease information, within the financial statements, of any Richmond House is included in the accounts as a heritage assets held by them as at the year end. The finance lease. At the time it was transferred from standard defines Heritage Assets as: Department for Communities & Local Government (DCLG) (now MHCLG), it was classed as a non- ‘A tangible asset with historical, artistic, scientific, specialised building and valued on an EUV basis. technological, geophysical or environmental qualities that is held and maintained principally for its (viii) Plant and machinery contribution to knowledge and culture.’

Plant and machinery includes the Great Clock Each category of heritage asset held by the House mechanism and In-House Services’ catering equipment of Commons, along with their applicable accounting and vehicles. The Great Clock was previously valued policy is detailed below. Further information regarding using appropriate indices at 31 March 2006. The cost of asset management policies can be found in Note 7. valuing the Great Clock outweighs the benefit provided, therefore there are no plans to re-value it. Catering (a) Historic furniture and House of Commons equipment and vehicles are not re-valued on the State Silver grounds of not being material. The House’s collection of historic furniture and State Silver is reported in the Statement of Financial Position (ix) Equipment at market value. The furniture collection consists mainly In accordance with IAS 16 computers, contemporary of historical furniture, silver, clocks and ceramics. Due furniture and other equipment are recognised at to the importance of these collections, all assets have depreciated historic cost due to short life and/or low been capitalised regardless of their individual value. value. Although the capitalisation threshold is £1,000, certain ICT equipment (including desktop computers, A valuation of the collections was carried out by monitors and printers below the threshold) are Bonhams and completed in March 2016. considered to be grouped assets and therefore are capitalised. It is the House’s policy to maintain its collection of historic furniture and State Silver in full working order and maintenance costs are charged to the Statement of Comprehensive Net Expenditure when incurred. Both the historic furniture collection and the State Silver are deemed to have indeterminate lives and as such the House does not consider it appropriate to charge depreciation.

102 Financial Statements (b) Parliamentary Art Collection The House of Commons antiquarian book collection The Parliamentary Art Collection is the national was moved to the British Museum in June 2003 when collection of art relating to the history of Parliament. the restoration of the King’s Library was finished. It contains portraits of Parliamentarians and The House Library has retained at Westminster any parliamentary events, past and present, wall paintings, books with parliamentary connections or which might sculpture, mosaics and textiles, oil paintings, works be needed for its normal services for Members. All the of art on paper and political memorabilia (including books that have been moved to the British Museum suffrage memorabilia) within the Houses of Parliament. remain in the Library’s catalogue and can be used at There is also a collection of coins and medals with Westminster if required. They also appear in the Central associations to former parliamentarians and members Library catalogue of the British Museum, who are of Parliamentary staff. In total the collection has circa responsible for routine conservation, and are available 9,000 objects. under supervision for public use in the Museum. The antiquarian books held by the British Museum For valuation purposes, the Parliamentary Art are not valued in line with the practice adopted for Collection is divided into two categories; those objects the Parliamentary Art Collection. As such they are not held as at 31 March 2000 and those objects acquired shown in the Statement of Financial Position. since that date. No valuation for the Collection at 31 March 2000 is currently included on the Statement of (d) The Speaker’s state coach Financial Position because obtaining a valuation for The Speaker’s state coach is a 17th century gilded a collection of this size and diversity would be costly. and painted carriage. Following a programme of During 2012-13, it was determined that the benefit conservation and repair in 2007-08, it was loaned to received by a valuation exercise at this time would not the National Trust for public display at the Carriage justify the expense incurred. This continues to be the Museum at Arlington Court in Devon. As part of the position of the House. loan agreement, the National Trust indemnifies the coach for an indemnity value of £1.6 million. Acquisitions since 1 April 2000 have either been made by purchase or donation. Purchases are recorded The value of the Speaker’s state coach is not currently at cost and donations are recorded at current value valued on cost benefit and practicality grounds. It is not ascertained by the House’s Curator of Works of Art therefore shown in the Statement of Financial Position. with reference, where appropriate, to the commercial (e) Archives art market. (i) Broadcasting The House’s duty of care responsibilities for the The broadcasting archive consists of audio and video Parliamentary Art Collection are carried out by the tape recordings of broadcast coverage from the Curator’s Office, with the cost of conservation, etc Chambers in both Houses and also Committees selected charged to the Statement of Comprehensive Net by the broadcasters. Audio dates from 1978 and the Expenditure. The individual works of art in the Collection House of Commons video collection dates from 1989 are deemed to have indeterminate lives and as such with some House of Lords material dating back to 1985. the House does not therefore consider it appropriate to charge depreciation. In November 2015 the Broadcast Unit switched from tape to server recording and in 2017 Parliament began (c) Antiquarian books the process of digitising the video tapes in order to preserve the content stored on the ageing video tapes. Almost all the House of Commons Library’s books Audio tapes will continue to be held in storage. were acquired after the 1834 fire in the Palace of Westminster, when most of the earlier stock was lost. The archive is valuable in an historical sense but is During the second half of the 19th century, there was a difficult to value in practice. High quality recordings deliberate policy of acquiring books that would have are made freely available as duplicated copies to been found in a country house library of that period. anyone who orders it with a small fee applied to cover As a result, the Library acquired through a mixture of the costs of transfer. Content dating back to 2007 can purchase, gifts and legacies a wide-ranging collection of books, including some that are now of considerable be downloaded without charge via parliamentlive.tv. antiquarian or scholarly interest. Consequently, the value for this archive is not included on the Statement of Financial Position.

Annual Report and Accounts 2018-19 103 (ii) Parliamentary Archives 1.13 Depreciation The Parliamentary Archives comprise several million Depreciation is charged to expenditure on the historic documents that have been preserved at the Palace of value or, for buildings, the re-valued amount of assets. Westminster from 1497 to date in a variety of formats For buildings, that element of the depreciation which from medieval vellum and parchment to born-digital relates to the increase in valuation in prior years is and digitised records. Parliamentary records prior charged to the Revaluation Reserve. This amount is to 1497 form part of the National Archives. Most of realised by transferring the Revaluation Reserve to the records are unique and have been preserved for the General Fund over the remaining useful life of their historical, legal and administrative importance, the asset. Land assets are not depreciated. consequently it is not deemed cost effective to obtain a value. Depreciation is charged on a straight-line basis. The period over which to depreciate property assets The Parliamentary Archives who provide the service is advised by the Valuation Office Agency (VOA). The were established within the House of Lords in 1946. The rates adopted are calculated to write off the valuation administration costs of this service have been shared of freehold buildings, plant, equipment and intangible with the House of Commons since 1999. Any operational assets by equal instalments over their estimated assets held by the Parliamentary Archives are disclosed useful lives, with the exception of heritage assets (i.e. within the House of Lords Resource Accounts. The historic furniture, State Silver and the Parliamentary Parliamentary Archives publishes an Annual Report Art Collection with an estimated life of more than 200 which is available via www.parliament.uk. Full details years). Heritage assets are not depreciated because the of the Parliamentary Archives acquisition policy are long remaining life or high residual value of the asset also available at this web address. makes any such charge immaterial. Capital works on leasehold property are depreciated on a straight-line (f) Ceremonial items basis over the lease period. The capitalised costs for assets in the course of construction are not The House’s collection of ceremonial items consists depreciated until the assets are brought into use. of four swords used by the Speaker’s Office. For accounting purposes, the lives of the property, The value of the ceremonial items is not currently plant and equipment and intangible assets such as included on the Statement of Financial Position as software licences are in the following ranges: it is not deemed practical to do so.

(g) Architectural salvage and estate archives Property: Years The architectural salvage collection consists of Land N/A examples of architectural fragments from the Palace of Westminster 70 Parliamentary Estate such as pieces of decorative Freehold property (excluding Portcullis House) 12–38 stonework and wood carving. Many of these pieces have Portcullis House 44 been retained to provide a record of the craftsmanship used in the Palace and Estate buildings throughout Leasehold property 2–30 their life. Cost information is not readily available and the benefit of obtaining valuations would not justify Plant and equipment: Years the cost, therefore it has not been recognised in the Furniture - standard 10 Statement of Financial Position. Plant & machinery 5–40 Fixtures and fittings - standard 10 The Estate Archive consists of Strategic Estates’ General office equipment 3–5 permanent records such as plans and drawings which are not recognised in the Statement of Financial IT equipment including telephony 3–5 Position because cost information is not readily Broadcasting equipment 10 available and the benefit of obtaining valuations Intangible assets 3–5 would not be cost effective. Nearly all the items are thought to have nominal financial value and no item Heritage Items: Years is worth more than £1,000. Historic furniture and Works of Art Indefinite

104 Financial Statements 1.14 Intangible assets Fees and charges are set in accordance with the House Intangible non-current assets are primarily software of Commons policy which is published via https://www. licences and other ICT enhancements provided by parliament.uk/documents/commons-finance-office/ third parties costing in excess of £1,000. These are Financial-Policies/Fees-and-Charges-policy.pdf capitalised and amortised over the expected useful life of the asset. 1.19 Foreign exchange Transactions which are denominated in foreign currency 1.15 Inventories are translated into sterling at the exchange rate ruling Inventories are valued as follows: on the date of each transaction.

•• Finished goods and goods for resale are valued 1.20 Leases at cost or, where materially different at current In accordance with IAS 37, leases are capitalised only replacement cost, and at net realisable value when substantially all risks and rewards of ownership only when they either cannot or will not be used. are transferred to the lessee.

•• Work in progress is valued at the lower of cost, 1.21 Private Finance Initiative (PFI) transactions including appropriate overheads, and net realisable value. During 2013-14 the House entered into a service concession agreement (see Note 9.2). This contract 1.16 Impairment has been disclosed in accordance with the appropriate The House of Commons reviews its assets for accounting standards (IFRIC 12: Service Concession impairment and accounts for any adjustments Arrangements and IAS 17: Leases). in accordance with the FReM. 1.22 Trade payables and other current liabilities 1.17 Current investments Trade payables are measured at the transaction amount. The House of Commons holds short term current Accruals for work completed on projects in the Strategic investments. These are all held in cash and are Estates work programme are calculated on the basis of included in the ’Bank and Cash in Hand’ figures. an estimate of the proportion of the project that has been Interest receivable on the House of Commons completed. The work of independent quantity surveyors is Commission Reserve is credited to that reserve. Any used to inform the estimate. other interest received is treated as operating income. The House is adopting NEC3 suite of contracts which IFRS 9 – Financial Instruments is applied by HM Treasury will enable a more collaborative approach to works in the FReM from 2018-19. This standard brings together contracts. One of the features of NEC3 is resolving issues all three phases of the financial instruments project: as they arise rather than at the end of the contract under Classification and Measurement; Impairment, and what is referred to as a compensation event. The nature Hedge Accounting. There has been no change in these of these compensation events will determine whether accounts following the implementation of IFRS 9. they are accounted for as trade payables or provisions and contingent liabilities. 1.18 Operating income 1.23 Provisions and contingent liabilities Operating income relates directly to the operating activities of the House of Commons and includes, In accordance with IAS 37, provisions are recognised refreshments, retail and visitor ticket sales, videos, when there is a present obligation (legal or fees from filming, private bill fees, and royalties. constructive) as a result of a past event, it is probable that the obligation will be settled and a reliable During the year a new accounting standard became estimate can be made of the amount of the obligation. effective - IFRS 15, Revenue from Contracts with Contingent liabilities are also disclosed in accordance Customers. This standard establishes the principles with IAS 37 and are similar to provisions, but where that should be complied with when recognising income. there is less certainty about the obligation to settle or As the majority of income received by the House of the amount cannot be reliably measured. Commons is in connection with retail sales (i.e. catering and tours), income is recognised at the time the service Where the time value of money is material, contingent or goods are provided, therefore the impact on these liabilities which are required to be disclosed under IAS accounts following the implementation of IFRS 15 is 37 are stated at discounted amounts. not material.

Annual Report and Accounts 2018-19 105 In addition, the House discloses for parliamentary 1.27 Segmental Reporting reporting and accountability purposes certain The analysis provided in Note 2 meets the reporting contingent liabilities where the likelihood of a transfer requirement of International Financial Reporting of economic benefit is remote. These remote contingent Standard, Operating Segments (IFRS 8). liabilities are stated at the estimates current amounts. 1.28 House of Commons Commission Reserve 1.24 VAT and Corporation Tax Under the powers provided by the House of Commons Irrecoverable VAT is charged to the relevant expenditure (Administration) Act 1978 as amended by the category or included in the capitalised purchase cost Government Resources and Accounts Act 2000, of fixed assets. Where output tax is charged or input VAT the House of Commons Commission has established is recoverable, the amounts are stated net of VAT. a reserve for any excess income generated. Agreement The House is not subject to Corporation Tax. of the Commission is required before any sums can be drawn down. 1.25 Third party assets The House of Commons holds third party assets in the form of gratuities and service charges on behalf of catering staff.

1.26 Impending application of newly issued accounting standards not yet effective IFRS 16 – Leases, will be effective for reporting periods beginning after 1 January 2020. The standard introduces a single lessee accounting model irrespective of the type of lease in operation. HM Treasury has issued guidance on the implementation of this accounting standard which the House of Commons intend to adopt.

Based on current information, when the standard is adopted in 2020-21, the general fund opening balance in the Statement of Financial Position would be adjusted by approximately £6 million and the Statement of Consolidated Net Expenditure will receive a charge of approximately £3.5 million.

106 Financial Statements Annual Report and Accounts 2018-19 107 2. Statement of Net Expenditure by Central Provision (CP): covers other centrally held funds. Operating Segment Shadow Sponsor Body (SSB): is responsible for the Each of the House of Commons Teams (or segments) business case and scope of the restoration programme report their resource spend separately on a monthly for the Palace of Westminster. Legislation is required for basis to the Commons Executive Board. Total Assets the Sponsor Body to be established as a stand-alone and net assets are managed and controlled at a organisation, which is the reason it has been set up in corporate level. shadow form. The work of each Team is described briefly below. In addition to the Teams listed above there are a number of smaller offices, which for the purpose of Chamber and Committees (CCT): provides secretariat, this report are merged into one segment: advice, procedural, reporting and other services that support the work of the Chamber and committees, Governance Office (GO): supports the Clerk of the and supports the House’s international relations. House of Commons in his roles as Accounting Officer and Corporate Officer, and provides assurance to him In-House Services (IHS): provides the accommodation, through risk management, health and safety reporting logistics, catering, retail, estate and asset and internal audit. It includes the secretariats for management, environmental management, fire safety, the House of Commons Commission, the Finance business continuity and other facilities required by and Administration Committees and other domestic the House. committees. It also supports the Commons Executive Board and the Director General. Strategic Estates (SE): brings together all teams delivering capital investment along with supporting Communications (CO): promotes the work of the House property, planning and design teams. Service to Members and Members’ staff and is also responsible for House-wide corporate communications Corporate Services (CS): is responsible for corporate and media engagement. strategy and planning. It develops HR and finance Office of the Speaker (SPK): is responsible for policies to support internal customers across the supporting all aspects of the Speaker’s duties, which House, organisational development and monitoring include the Chamber, honours and awards and of performance. representative matters. Staff in the Speaker’s Office, Participation (PAR): seeks to engage the public in the help organise the Speaker’s meetings, talks and visits work Parliament does. It provides educational to public groups, schools and colleges across the UK. and visitor tours and retail services. Research and Information (R&I): informs the work of the House and its Members. Parliamentary Digital Services (PDS): a joint department with the House of Lords which provides information and communications technology services to both Houses of Parliament, including the funding set aside for investment on ICT related programmes and projects. The Parliamentary Security Department (PSD): is responsible for the strategy, planning and overall delivery of security across the Parliamentary Estate. The Director chairs the Parliamentary Security Board.

108 Financial Statements Total Total £000 £000 (22,071) (19,578) 286,264 264,193 248,271 228.693 1,559,101 1,486,077 1,512,132 1,344,202 – – PSD CP SSB PSD CP

& Co & CO GO/SPK GO/SPK PDS PDS R&I R&I 2017-18 2018-19 2018-19 PAR PAR CCT IHS SE CS CCT IHS SE CS (225) (12,261) (5,304) (30) (3,921) (20) (151) (41) (118) (521) (10,485) (1,921) (44) (4,299) (18) (87) (17) (118) (2,068) £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000 38,003 47,130 84,670 12,703 9,109 13,010 36,525 5,417 35,704 3,661 332 37,778 34,869 79,366 12,673 5,188 12,990 36,374 5,376 35,586 3,661 332 35,054 44,826 60,604 11,075 8,680 12,504 38,829 4,842 28,648 3,209 34,533 34,341 58,683 11,031 4,381 12,486 38,742 4,825 28,530 1,141 Gross Expenditure Gross Income Net Expenditure Net Total assets Total assets Net Gross Expenditure Gross Income Net Expenditure Net Total assets Total assets Net

Annual Report and Accounts 2018-19 109 2.1. Reconciliation between Operating Segments and Statement of Comprehensive Net Expenditure

2018-19 2017-18 £000 £000 Total net expenditure reported for operating segments 264,193 228,693

Net (gain)/loss on revaluation of Property, Plant and Equipment 52,665 (174,213)

Total net expenditure per Statement of Comprehensive Net Expenditure 316,585 54,480

The revaluation of the Parliamentary Estate during the financial year resulted in a net loss of £63,799,000 reflecting an improvement in the property market and changes to the tender price index and location factor used for interim valuations. The net revaluation loss of £63,799,000 has been allocated between the Revaluation Reserve (loss: £52,665,000) and the Statement of Comprehensive Net Expenditure (loss: £11,134,000).

110 Financial Statements 3. Expenditure

2018-19 2017-18 Note £000 £000 £000 £000

Grants 4 3,698 3,548 Goods and services Accommodation services 36,301 29,172 Security 23,822 18,648 Computer maintenance 11,589 13,128 Finance and specialist services 7,520 5,227 Communications 5,270 5,863 Catering and other supplies 4,569 4,280 Other staff costs 4,036 3,589 Travel and subsistence 3,166 2,092 Information 2,134 2,176 Broadcasting 1,463 1,264 Office supplies 978 1,002 100,848 86,441 Rentals under operating leases Buildings rental 12,232 11,787 Other rental 553 636 12,785 12,423

Service Concessionary Arrangements Service charge element of Finance Lease 8 605 Interest on Finance Lease – 12 8 617 Non-cash items Depreciation 6 29,663 26,291 Amortisation 8 248 269 Impairment 6 1,821 268 (Profit)/loss on disposal of property, plant & equipment 6 38 27 Net (gain)/loss on revaluation of property, plant and equipment 2.1 11,134 3,868 Auditors’ remuneration and expenses18 94 85 Provisions 14 390 574 43,388 31,382 Sub total 160,727 134,411

Staff Costs19 125,537 113,860

Grand Total 286,264 248,271

18 Auditors have received no remuneration for non-audit work 19 See Accountability Report, page 81 for details of staff costs

Annual Report and Accounts 2018-19 111 4. Grants paid

Grants to parliamentary bodies are split between the House of Commons and the House of Lords on a 70:30 basis. The table below shows the House of Commons contribution only.

2018-19 2017-18 £000 £000 Commonwealth Parliamentary Association (UK Branch) 1,286 1,273 History of Parliament Trust 1,173 1,156 Inter Parliamentary Union (British Group) 929 873 British Irish Parliamentary Assembly 109 91 British American Parliamentary Group 81 80 Association of Former Members of Parliament 13 13 Other parliamentary (various) 107 62

3,698 3,548

5. Income

2018-19 2017-18 £000 £000 Receipts from sales 15,251 14,321 Rental receipts and associated charges 957 929 Other receipts 5,851 2,248 Fees on private bills 1 12 22,060 17,510 Donated Asset (see note 6 for details) 11 –

22,071 17,510

112 Financial Statements Annual Report and Accounts 2018-19 113 – – – – – (6) £000 Total (1,229) (1,269) (1,827) 29,663 (99,281) (163,080) 2,668,776 1,539,540 1,493,350 1,104,573 1,175,426 2,644,113 – – – – – – – – – – – – construction Assets under – – – – – – (11) 706 (2,873) Technology Information – – – – – (9) (1,220) (6) (11) (1,258) (348) 2,167 Plant and Plant Machinery

– – – – – – – – – – 474 665 5,477 50,651 261 726 3,656 2,452 3,340 26,287 2,191 2,629 23,851 Furniture Furniture & Fittings – – – – – – – – – – – – 22 11 Assets Heritage Heritage – – – – – – – – – (6) 318 – – – – – – – (1,468) 84,213 24,702 (99,275) 1,069,960 2,534 1,144,533 2,222 – – – – – – – – – – – – – Land Buildings Dwellings £000 £000 £000 £000 £000 £000 £000 £000 17,182 (179,965) (297) 245,637 2,302,179 17,572 25,589 3,668 6,848 33,850 33,433 262,819 1,134,999 14,741 25,622 1,690 5,981 12,477 81,211 245,637 1,157,646 15,350 25,589 1,477 4,219 9,999 33,433 262,819 2,204,959 17,275 25,622 4,142 9,321 38,764 81,211

21 11,250 from the Speakers Art Fund was made towards the purchase of a portrait of Lucy, Countess Baldwin of Bewdley, by De Lazlo. De by Lazlo. of Bewdley, Baldwin Countess of Lucy, of a portrait the purchase was made towards Art Fund the Speakers 11,250 from dings were valued in March 2019 by Marc Seabrook, FRICS of Valuation Office Agency. Office FRICS of Valuation Seabrook, Marc 2019 by in March valued were dings 20 A donation of £ Land and Buil  Donations Revaluations Disposals Additions Reclassifications Transfer of Estimate Transfer Impairments Charge in the year Charge Disposals Impairments Reclassifications Revaluations

Carrying amount Carrying 2019 at 31 March Carrying amount amount Carrying at March 2018 at March At 31 March 2019 At 31 March Cost or valuation Cost As at 1 April 2018 Depreciation At 1 April 2018 At 31 March 2019 At 31 March Richmond House is included in Land and Buildings as a finance lease. The carrying value for the asset is £114,258,000 (Land £56,160,000, buildings (£58,098,000). buildings (Land £56,160,000, for the asset is lease. The carrying value £114,258,000 as a finance in Land and Buildings Richmond House is included 20 21 6. Property, plant and equipment 2018-19 plant 6. Property,

114 Financial Statements – – (66) (93) (268) £000 Total 4,270 6,354 26,291 309,772 193,778 480,117 835,159 1,493,350 1,153,729 1,175,426 1,988,888 2,668,776 – – – – – – – – – – – construction Assets under – – – (66) (93) 938 (970) (268) 4,270 6,354 Technology Information – – – – – – – – – 216 3,896 24,595 639 3,230 Plant and Plant Machinery – – – – – – – – – 247 285 2,191 2,629 23,851 1,906 1,990 16,417 Fittings Furniture & Furniture – – – – – – – – – – – 67 32 Assets Heritage Heritage – – – – – – – – 216 287 – – – – – – – 21,850 309,556 813,127 1,719 1,144,533 2,222 – – – – – – – – – – – Land Buildings Dwellings £000 £000 £000 £000 £000 £000 £000 £000 (7,171) 485,900 1,388 56,160 105,597 245,637 1,157,646 15,350 25,589 1,477 4,219 9,999 33,433 196,648 894,555 14,465 25,490 1,515 4,642 6,606 9,808 196,648 1,707,682 16,184 25,490 3,421 6,632 23,023 9,808 245,637 2,302,179 17,572 25,589 3,668 6,848 33,850 33,433 22

23 dings were valued in March 2018 by Marc Seabrook, FRICS of Valuation Office Agency.. Office FRICS of Valuation Seabrook, Marc 2018 by in March valued were dings The tr Land and Buil Impairments Revaluations Transfer of estimate/Donations of estimate/Donations Transfer Disposals Reclassifications Additions Charge in the year Charge Disposals Impairments Reclassifications Revaluations

carrying amountcarrying 2018 at 31 March Carrying amount Carrying 2017 at 31 March At 31 March 2018 At 31 March Cost or valuation or valuation Cost As at 1 April 2017 Depreciation At 1 April 2017 At 31 March 2018 At 31 March 2017-18 comparator figures figures comparator 2017-18 22 23 £4,270,000). less (£6,354,000 of £2,084,000 IT assets which has a carrying value ansfer of Members

Annual Report and Accounts 2018-19 115 Land and Buildings analysed by Net Book Value Analysed by individual land, buildings and investment property

31 March 2019 Land Buildings Investment Total £000 £000 £000 £000 Palace of Westminster 24 89,400 692,374 – 781,774 Portcullis House 51,808 293,593 – 345,401 Richmond House 56,160 58,098 – 114,258 Norman Shaw North 20,434 16,055 – 36,489 1 Parliament Street 14,609 11,952 – 26,561 Norman Shaw South 10,000 9,230 – 19,230 1 Derby Gate 9,488 7,531 – 17,019 1 Canon Row 7,860 6,360 – 14,220 49–53 Parliament Street 3,061 4,787 – 7,848 Visitors Reception building – 8,982 – 8,982 Improvements to leasehold buildings* – 4,564 – 4,564 Education centre – 3,686 – 3,686 3 Parliament Street 2,438 2,162 – 4,600 2 Parliament Street 1,950 1,800 – 3,750 4 Canon Row 1,176 1,224 – 2,400 2 Canon Row 1,237 1,057 – 2,294 102 Rochester Row 380 445 – 825 22 John Islip Street 663 209 – 872 Abingdon St Car Park – – 5,167 5,167 Units A, B & C Portcullis House – – 7,110 7,110 10 Bridge Street – – 4,100 4,100 11 Bridge Street – – 1,410 1,410 Net Book Value at 31 March 2019 270,664 1,124,109 17,787 1,412,560

* Improvements to leasehold buildings are not valued by the Valuation Office Agency (VOA)

24 The total value of the Palace at 31 March 2019 was £1,302,957,000 (House of Commons’ share £781,774,000)

116 Financial Statements 31 March 2018 Land Buildings Investment Total £000 £000 £000 £000 Palace of Westminster25 82,200 726,518 – 808,718 Portcullis House 41,796 276,624 – 318,420 Richmond House 56,160 60,352 – 116,512 Norman Shaw North 20,628 16,878 – 37,506 1 Parliament Street 14,517 12,873 – 27,390 Norman Shaw South 10,083 9,687 – 19,770 1 Derby Gate 9,247 7,877 – 17,124 1 Canon Row 7,933 6,417 – 14,350 49–53 Parliament Street 3,073 5,015 – 8,088 Visitors Reception building – 9,134 – 9,134 Improvements to leasehold buildings* – 3,788 – 3,788 Education centre – 4,300 – 4,300 3 Parliament Street 2,496 2,304 – 4,800 2 Parliament Street 2,015 1,935 – 3,950 4 Canon Row 1,300 1,200 – 2,500 2 Canon Row 1,291 1,149 – 2,440 102 Rochester Row 387 473 – 860 22 John Islip Street 600 200 – 800 Abingdon St Car Park – – 4,773 4,773 Units A, B & C Portcullis House – – 7,600 7,600 10 Bridge Street – – 4,260 4,260 11 Bridge Street – – 1,550 1,550 Net Book Value at 31 March 2018 253,726 1,146,724 18,183 1,418,633

25 TThe total value of the Palace at 31 March 2018 was £1,347,865,000 (House of Commons’ share £808,718,000)

Annual Report and Accounts 2018-19 117 7. Heritage assets

7.1 Historic furniture and House of Commons State Silver The collection consists of:

House of Commons Shared with House of Lords Number of items Number of items Clocks 98 6 Silver (non-State silver) 67 – Furniture 3,639 1,782 Other 198 10 4,002 1,798 House of Commons State Silver 1,098 – 5,100 1,798

Many of the items are in continual use throughout the Estate. Those items in storage are either held on-site or by a third party in secured off-site storage facilities.

The House’s detailed management, preservation, disposal and access policy have been approved by the Parliamentary Estates Forum. Subject to the approval of the House, the Head of Collection (Furniture and Decorative Arts) in the In-House Services Team, may dispose of items from the collection, although this will only happen in exceptional circumstances and will be in accordance with the Museum Association’s disposal policy.26 The vast majority of items in the collection were acquired over 40 years ago.

Note 6 includes the value of the historic furniture (£15,573,970) plus House of Commons State Silver (£2,612,120).

A summary of transactions for the last five years is as follows:

2018-19 2017-18 2016-17 2015-16 2014-15 £000 £000 £000 £000 £000 At 1 April 16,280 16,280 16,280 16,267 16,254

Additions – – – 13 13 At 31 March 16,280 16,280 16,280 16,280 16,267

26 www.museumsassociation.org/collections/disposal-toolkit-and-training

118 Financial Statements 7.2 Parliamentary Art Collection The Collection has circa 9,000 works of art, over 80% of which are on display throughout the buildings of the Parliamentary Estate at any one time. The earliest pieces date from the medieval age, with major holdings dating from the 18th, 19th and 20th centuries, and significant contemporary holdings also. Although historically this is a single collection of art for the Palace of Westminster, in 1992 the Parliamentary Art Collection was divided between the two Houses, with each House assuming ownership responsibilities for its share.

The collection comprises the following categories:

Purchased prior to 31 March 2000 Donated prior to 31 March 2000 Number of items Number of items Paintings & prints 4,796 1,534 Busts 170 49 Medieval statuary 6 – Murals & mosaics 122 17 Tapestries 9 1 5,103 1,601

A summary of transactions for the last five years is as follows:

2018-19 2017-18 2016-17 2015-16 2014-15 £000 £000 £000 £000 £000 At 1 April 7,372 7,305 7,214 7,118 6,737 Additions 22 67 76 71 31

Donations 11 – 15 25 350 At 31 March 7,405 7,372 7,305 7,214 7,118

The Parliamentary Art Collection is managed by the Curator’s Office, which is responsible for all aspects of its management, care, conservation, documentation, presentation and interpretation in accordance with the policies that are approved by the Speaker’s Advisory Committee Works of Art. Further details, including examples of some of the artwork, can be found on the ‘Art in Parliament’ website at www.parliament.uk/art.

Annual Report and Accounts 2018-19 119 The Advisory Committee seeks to acquire works of art 7.4 Ceremonial items for the House of Commons Collection which fall into The House’s collection of ceremonial items consists of one or more of the following categories: the Mace, Swords and Medallions. Not all the items are •• Portraiture owned by the House; many are owned by the Crown and are returned to St James Palace for safekeeping when •• Parliamentary history Parliament is dissolved: •• Political satire •• The Mace is on loan from the Royal Household. •• Political commemoratives The House bears the cost of repairing any •• The United Kingdom and Parliament today damage to the Mace while it is in our care. •• The Speaker’s Office own four ceremonial swords An active loans policy is pursued, with works of art and maintenance costs are charged to the acquired on loan to fill gaps in the Collection. Loans are Statement of Comprehensive Net Expenditure from both public bodies and private individuals. Loans when incurred. will not be accepted from bodies or individuals which would be seen to compromise the integrity of the House, •• There are forty-two medallions which are worn and therefore the identity of each lender must be made by the Doorkeepers during parliamentary known in advance of the loan proceeding. term time. Like the Mace, these are not owned by the House but are on loan from the Royal Household, hence their value is not included The House of Commons will not acquire, whether by in the Statement of Financial Position. The purchase, gift, bequest or transfer, any work of art or House is responsible for the maintenance of object unless the Works of Art Committee is satisfied the medallions and costs are charged to the that the Collection can acquire a valid title to the item Statement of Comprehensive Net Expenditure in question, and that in particular it has not been when incurred. acquired in, or exported from, its country of origin (or any intermediate country in which it may have been legally owned) in violation of that country’s laws.

The House’s disposal policy for the Parliamentary Art Collection was approved during 2012-13.

7.3 Medals The Parliamentary Art Collection also includes a medal collection. The collection consists of awards instituted by the British Crown and issued to the armed forces over the last two centuries as well as medals for gallantry awarded to civilians.

A total of 546 medals are recorded in the collection on public display in the Medals Corridor in the House of Commons where it can be viewed.

120 Financial Statements 8. Intangible assets The House’s intangible assets comprise software licences and intellectual property rights.

Trademarks Software & Artistic Licences Originals Total £000 £000 £000 Cost or valuation At 1 April 2018 3,017 16 3,033 Additions 4 – 4 Disposals – – – Reclassifications – – – At 31 March 2019 3,021 16 3,037 Amortisation At 1 April 2018 2,244 3 2,247 Charged in year 247 1 248 Disposals – – – Reclassifications – – –

At 31 March 2019 2,491 4 2,495 Carrying amount at 31 March 2018 773 13 786

Carrying amount at 31 March 2019 530 12 542

Trademarks Software & Artistic Licences Originals Total

£000 £000 £000 Cost or valuation

At 1 April 2017 2,620 16 2,636

Additions 397 – 397

Disposals – – –

Reclassifications – – –

At 31 March 2018 3,017 16 3,033 Amortisation

At 1 April 2017 1,976 2 1,978

Charged in year 268 1 269

Disposals – – –

Reclassifications – – –

At 31 March 2018 2,244 3 2,247

Carrying amount at 31 March 2017 644 14 658

Carrying amount at 31 March 2018 773 13 786

Annual Report and Accounts 2018-19 121 9. Capital and other commitments

9.1 Commitments under leases - Operating leases Total future minimum lease payments based on current operating lease agreements are given in the table below for each of the following periods.

2018-19 2017-18 £000 £000 Obligations under operating leases comprise: Buildings Not later than one year 12,055 10,848 Later than one year and not later than five years 31,969 29,540 Later than five years 64,152 27,530 Total 108,176 67,918

Other27 Not later than one year 330 435 Later than one year and not later than five years 330 254 Later than five years – – Total 660 689

9.2 Commitments under PFI and other service concession arrangements (i) On-balance sheet (SoFP)

During 2013-14, the Houses of Parliament contracted with a supplier to provide and maintain specific parts of the IT network. Under IFRIC 12, the provision of assets by the supplier was considered to be an asset of the Houses of Parliament and was capitalised. This contract expired during 2018-19 and the figures below show only the prior year position.

2018-19 2017-18 £000 £000

Rentals due within one year – 28 Rentals due later than one year but not later than five years – – Rentals due later than five years – – – 28 Less: interest element – –

Present value of obligations – 28

27 In accordance with International Accounting Standards, the House is required to disclose details of all lease arrangements. The House has an option agreement with CEVA Logistics Ltd, provider of services relating to the Off-Site Consolidation Centre that could result in the House funding the lease costs of the warehouse that is used, however this agreement can only be triggered by the House.

122 Financial Statements Details of the minimum service charge are given in the table below for each of the following periods.

2018-19 2017-18 £000 £000

Service charge due within one year – 38 Service charge due later than one year but not later than five years – – Service charge due later than five years – –

Total – 38

(ii) Charge to the Statement of Comprehensive Net Expenditure and future commitments

The total amount charged in the Statement of Comprehensive Net Expenditure in respect of off-balance sheet (SoFP) PFI or other service concession transactions and the service element of on-balance sheet PFI or other service concession transactions was £8,000 (2017-18: £605,000).

9.3 Finance Leases (i) Finance Lease liability

During 2017-18, the House agreed a lease with DCLG for Richmond House covering the period from the date of occupation, 12 January 2018, to July 2019 at a peppercorn rent. It is the intention of all parties that during 2019-20, the property will be transferred to the House for no consideration. This transaction has been treated as a finance lease.

The finance lease for Richmond House has been written down over the useful life of the building (26 years). The fair value of the lease is valued at the date of occupation at £117,000,000 (Land £56,160,000; Building £60,840,000).

2018-19 2017-18 £000 £000 Finance lease creditor 116,062 117,000 Write down in year (4,334) (938) 111,728 116,062

Creditor falling due within 1 year 4,334 4,334

Creditor falling after due after 1 year 107,394 111,728

Annual Report and Accounts 2018-19 123 9.4 Capital commitments

2018-19 2017-18 £000 £000

Contracted capital commitments at 31 March not otherwise included in these financial statements for property, plant and equipment. 56,009 59,658

9.5 Financial instruments As the cash requirements of the House are met through the Estimates process, financial instruments play a more limited role in creating and managing risk than would apply to a non-public sector body of a similar size. The majority of financial instruments relate to contracts for non-financial items in line with the House’s expected purchase and usage requirements and theHouse is therefore exposed to little credit, liquidity or market risk.

Liquidity risk The House of Commons is financed by resources voted annually by Parliament. As such it is not exposed to significant liquidity risks.

Interest rate risk All of the House’s financial assets and liabilities carry fixed or nil rates of interest. The House is not therefore exposed to significant interest rate risk.

Foreign currency risk Foreign currency would not usually form part of the House’s assets or liabilities and as such it is not exposed to any significant exchange risks.

Fair values The fair values of the House primary financial assets and liabilities as at 31 March 2019 are the same as the book values shown in the Statement of Financial Position.

10. Inventories

2018-19 2017-18 £000 £000 Retail 365 413 Catering 34 68 Store equipment 166 74 Other 35 33 600 588

124 Financial Statements 11. Cash and cash equivalents

2018-19 2017-18 £000 £000

Balance at 1 April 1,677 4,995

Net change in cash and cash equivalent balances 1,314 (3,318)

Balance at 31 March 2,991 1,677

The following balances at 31 March were held at:

Government Banking Service 1,044 138

Commercial banks and cash in hand 635 239

House of Commons Commission Reserve account (see note 1.28) 1,312 1,300

Balance at 31 March 2,991 1,677

12. Trade receivables, financial and other assets

2018-19 2017-18 £000 £000 Amounts falling due within one year: Trade receivables 8,089 9,057 Deposits and advances 716 620 VAT and other taxes 1,002 696 Prepayments and accrued income 5,056 4,716 14,863 15,089 Amounts falling due after more than one year: Prepayments and accrued income 565 642 15,428 15,731

13. Trade payables and other current liabilities

2018-19 2017-18 £000 £000 Amounts falling due within one year: Other taxation and social security 3,123 2,854 Trade payables 2,933 3,866 Other payables 6,336 3,154 Accruals and deferred income 54,619 36,534

Current part of imputed finance lease element of on-balance sheet (SoFP) service 4,334 4,362 concession arrangements

71,345 50,770

Amounts issued from the Consolidated Fund for supply but not spent at year end 1,679 377 73,024 51,147

Amounts due to be paid after one year* 107,394 111,728

* The figure of £107.4 million for ‘amounts due to be paid after one year’ is the

accounting impact of the finance lease for Richmond House. Annual Report and Accounts 2018-19 125 14. Provisions for liabilities and charges

Legal Claims Dilapidation & Other Costs Departures Total £000 £000 £000 £000 Balance at 1 April 2017 96 4,467 51 4,614 Provided in the year 188 351 35 574 Provisions not required written back – – – – Provisions utilised in the year (82) – (51) (133) Borrowing costs (unwinding of discounts) – – – – Balance at 31 March 2018 202 4,818 35 5,055 Provided in the year 39 351 – 390 Provisions not required written back – – – – Provisions utilised in the year (186) – (35) (221) Borrowing costs (unwinding of discounts) – – – – Balance at 31 March 2019 55 5,169 – 5,224

Legal claims Provision has been made for various legal claims against the House of Commons. This reflects all known claims where legal advice indicates that it is more than 50% likely that the claim will be successful and the amount of the claim can be reliably estimated.

Legal claims which may succeed but are less likely to do so or cannot be estimated reliably are disclosed as contingent liabilities in Note 15.

Dilapidation costs This reflects the legal obligation of the House, in accordance with the terms of the lease agreement of two leasehold properties, to provide for re-instatement and dilapidations.

Departures This relates to departures through the Voluntary Exit Scheme.

126 Financial Statements 15. Contingent liabilities The House of Commons has the following contingent liabilities:

Increase Obligation 1 April 2018 in year expired in year 31 March 2019 £000 £000 £000 £000

Personal injuries and employee claims 43 – (14) 29

In addition, during 2018-19, the House received a claim from one of its suppliers relating to contract delays due to flooding on the Estate. As at the 31 March this claim was outstanding. Since then, the House has acknowledged liability but final settlement has yet to be agreed. For commercial reasons we are unable to provide any more information at this time.

16. Related-party transactions As Members of Parliament, any related party transactions of Commission Members should be recorded in the Register of Members’ Interests.

J Benger by virtue of his position as Clerk Assistant, is a Trustee of the History of Parliament Trust, which receives a grant from the House of Commons.

D Natzler KCB, the Clerk of the House until 1 March, J Benger, the Clerk of the House from 4 March, and M Barrett, the Finance Director were Trustees of the Speaker’s Art Fund during 2018-19, which receives a donation in lieu of commission on sales from the House of Commons (Participation).

P Young, a member of the Board, was a Trustee for the Speaker’s Parliamentary Placement Scheme (SPPS) which receives a donation from the Members’ Estimate. The SPPS was dissolved in June 2018.

During the year, no Board member has undertaken any material transactions with the House of Commons during the year.

The House of Lords and the House of Commons share some buildings and services. These include the Palace of Westminster, together with services provided by Strategic Estates and Parliamentary Maintenance Services, Parliamentary Archives, Parliamentary Digital Service, and certain Education and Outreach activities.

These joint arrangements are charged between the two Houses on an agreed percentage basis of underlying costs for each service (certain accommodation and overhead costs are excluded). Each House includes its share of the relevant asset base and/or service cost in their Annual Accounts.

The major shared services, excluding minor shared services, are recharged on the following basis:

House of Commons House of Lords Communications services, POST 70% 30% Visitor Tours 70% 30% Accommodation and Works services (including Curator’s Office) 60% 40% Broadcasting services 60% 40% Parliamentary Archives 40% 60% Parliamentary Security Department 70% 30% Parliamentary Procurement and Commercial Service 70% 30%

Annual Report and Accounts 2018-19 127 The House of Commons incurred expenditure of 17. Third-party assets £101,526,000 (2017-18: £86,061,000) on behalf of the The House of Commons holds the following third party House of Lords during 2018-19. The balance as at assets in a public bank account. These are not the 31 March 2019 relating to accommodation, works and House’s assets and are not included in the accounts. other shared services owed to the House of Commons The assets held at the reporting period date to which by the House of Lords was £3,361,000 (2017-18: it was practical to ascribe monetary assets, such as £4,206,000). bank balances were:

The House of Lords incurred expenditure of 2018-19 2017-18 £1,657,000 (2017-18: £1,475,000) on behalf of the House of Commons during 2018-19. The balance as at £000 £000 31 March 2019 owed to the House of Lords by the House Gratuities and service charges 43 60 of Commons was £ 319,000 (2017-18: £125,000).

The Parliamentary Digital Service manages the ICT for 18. Events after the reporting period date both Houses. Each House pays for its own IT hardware, with the costs of shared services being split on an In accordance with the requirements of IAS 10, post agreed 70:30 ratio (Commons: Lords). Statement of Financial Position events are considered up to the date on which the accounts are authorised The British-Irish Parliamentary Assembly (BIPA) is for issue by the Accounting Officer. This is the date of provided with accounting services and accommodation. the Certificate and Report of the Comptroller and The House made payments of £144,000 on behalf Auditor General. of the BIPA in 2018-19. At the year end, the balance There are two events that occurred after 31 March 2019 due from BIPA in respect of 2018-19 expenditure was that require disclosure: £37,000. Accommodation is also provided to the British American Parliamentary Group (who are also given •• It is the intention of the House of Commons to accounting support at the year-end), Commonwealth purchase the freehold of 21 Dartmouth Street for Parliamentary Association (UK Branch) and the British the sum of £95 million plus VAT, in July 2019. Group of the Inter-Parliamentary Union. •• The Outline Business Case for the Northern Estate Programme was approved on 30 June 2019. Any implications of this will be considered in the annual accounts of the current financial year (2019-20).

128 Financial Statements Annual Report and Accounts 2018-19 129 Administration Estimate Audit and Risk Assurance Committee Annual Report 2018–19 04

130 Administration Estimate Audit and Risk Assurance Committee Annual Report 2018–19 Administration Estimate Audit and Risk Assurance Committee Annual Report 2018–19

Annual Report and Accounts 2018-19 131 Annual Report of the Administration Estimate Audit and Risk assurance Committee

Introduction Conclusion for the financial

1. This is the nineteenth annual report of the House year 2018-19 of Commons Administration Estimate Audit and The effectiveness of the system of governance, risk Risk Assurance Committee (AEARAC), which was management and internal control (the “system of established by the House of Commons Commission internal control”) on 15 May 2000. Main Conclusion 2. This report outlines the AEARAC’s conclusions in relation to the Administration Estimate for the 4. The financial eary 2018–19 has presented a variety financial year 2018-19. The Committee’s findings are of challenges to the House of Commons, which has set out by reference to the key areas on which it is put it in the spotlight. The debates concerning the required to provide assurance to the Accounting departure of the UK from the European Union have Officer under its terms of reference. put the House of Commons at the centre of the public’s attention. Media attention in the previous 3. Details of the AEARAC’s terms of reference, financial year concerning allegations of bullying and membership and activity during the year are harassment of House staff has continued following provided in the Appendix to this report. the publication of Dame Laura Cox’s independent report, and slow progress has been made in implementing the recommendations. There has also been interest in the progress of the Restoration and Renewal of the Palace of Westminster Programme, particularly following the recent fire at Notre Dame de Paris. The legislation to establish the bodies that will deliver this programme is currently before Parliament. Underlying these headline items, there has been relative stability. There have been no major governance changes, and the governance framework has benefitted from a fully resourced Internal Audit Team, supported by its newly appointed third-party provider RSM.

132 Annual Report of the Administration Estimate Audit and Risk Assurance Committee 5. The improvements of recent years, many instigated 7. We note the Head of Internal Audit’s overall opinion following concerns expressed by the Committee, on the House’s framework of governance, risk have begun to bear fruit. For example, work to management and control for 2018-19 as a moderate improve risk management has continued to the opinion. This means that the management, extent that an independent audit has provided control and governance processes in place are an improved level of moderate assurance. 1 generally adequate for the purposes of the House Administrative changes that have strengthened of Commons but some improvements are required day to day compliance issues, such as the creation to enhance the adequacy and effectiveness of the of a central log of policies and a system for the framework. We concur with this view. This builds on registration of staff interests are now embedded the improvements described in the 2017-18 opinion, among staff. Further improvements have been which concluded that “significant progress has been made, such as better tracking of internal audit made across the board [and] the extent to which actions that concern services shared with the House the evidence available fell short of supporting a of Lords. However, the Committee have raised a Moderate opinion was marginal, and the focus and number of concerns related to the uptake of fire effort that management has invested in order to safety training by MPs and their staff (5% and 3% improve the GRC framework must be recognised”. respectively), and have implored management to Independent challenge from Internal Audit and take firm action on this. The audit of Key Financial the Committee will be essential to continue this Controls received a substantial assurance improvement, and to ensure there is no complacency rating, reflecting the strong nature of the control or backsliding as the Service grapples with the environment in this important area. undoubted tests and demands which lie ahead.

6. Notwithstanding the areas of improvement, some Supporting evidence areas of concern, identified in last year’s Report, still remain. This includes in relation to the status 8. The Committee has benefitted from a completed of the control environment in Strategic Estates. annual audit plan in 2018/19, as the Internal Audit Similar issues have arisen in the audit reports for Team has overcome its resourcing issues during a number of different projects, which implies that the year. The plan was conducted on a ‘functional’ the organisation cannot yet evidence that it has basis, focusing on the control frameworks operated learned lessons from these. Furthermore, in some by teams. The advantage in this approach was areas progress has been very slow in closing internal that it gave the new Internal Audit Team an audit actions. These concerns were addressed at opportunity to obtain a greater understanding of a Committee meeting by the Managing Director of the broader organisation and the overall state of the Strategic Estates in response to a joint letter from Governance, Risk Management and Control (GRC) this Committee and the Lord’s Audit Committee framework. The Committee has noted that given seeking assurance. The Committee was told about the experience of this year, the 2019/20 audit plan improvements to staffing, governance and culture will take a different approach. We have received within Strategic Estates. However, as there have not assurances that the plan will cover essential been any recent audit reports covering Strategic functions such that the external auditors can rely Estates, there is a lack of independent assurance. on the coverage of the audit reports. This will be an area of close scrutiny in the coming year. The Committee has also kept a close eye on 9. Two internal audits received a Substantial the cultural changes required to embed safety opinion, and four received a Moderate opinion. management. This is an area that must improve as, These audits had a broad scope, and collectively with the challenges to the physical infrastructure of provide assurance relating to key aspects of the the estate, this risk will remain a significant feature Governance, Risk Management, and Control for the foreseeable future. framework across the House. The Committee has closely scrutinised the timely closure of agreed management actions arising from these reports. Where actions have become overdue, we have asked the management team to attend a meeting of the Committee to explain the reason for delay and the action taken thus far.

1 The Principal Risks to the House of Commons, as at 31 March 2019, are listed on pages 72 and 73 of the Annual Report and Accounts.

Annual Report and Accounts 2018-19 133 10. The only audit to receive a Limited rating, Contract 12. During the year, the Committee has considered Lifecyle Management, confirmed the broad views papers covering the governance arrangements of key stakeholders as to the challenges faced by for the Restoration and Renewal of the Palace the organisation. The audit in part sought feedback of Westminster Programme during the shadow on the extent of progress made since the previous phase and for associated internal audit planning. review in 2017, which also gave limited assurance. It also held a seminar jointly with the Lords Audit The effectiveness of contract management is Committee where it was updated on the programme inconsistent across the organisation. While a and the development on assurance and audit degree of comfort can be taken from the level of arrangements. Until the Parliamentary Buildings issue recognition from management, this must be (Restoration and Renewal) Bill is enacted and comes matched by a desire to take action to improve the into force, the work of the R&R programme remains control environment in this area of activity. within the remit of the Committee, and we note that a greater degree of internal audit work is planned 11. In addition to the consideration of internal audit for 2019-20, commensurate with the forecast reports, the Committee has also considered a variety increase in expenditure on the programme. of matters as they have arisen over the course of the year. During the consideration of the Administration 13. In spring 2019, the Committee considered the Annual Report and Accounts 2017-18, issues arose findings of a review of its own effectiveness. This in relation to the format of that document and also highlighted both straightforward improvements that the VAT treatment of the Parliamentary Estate. As we can make now, such as systematically requesting such, the Committee have taken a greater role in the declaration of conflicts of interests at each overseeing the production of the 2018-19 Annual meeting, and longer term actions including report and Accounts, receiving regular updates building up a comprehensive assurance map to on the proposed timetable and the progress made allow the Committee to identify the areas with against this. In the summer of 2018, in relation greatest risk and assess the comprehensiveness to media reports of bullying and harassment in and reliability of assurances from across the the House of Commons, the issue of the use of organisation. We have also discussed with the Lords settlement agreements and confidentiality clauses Audit Committee the effectiveness of joint committee was referred to the Committee for consideration by meetings and are endeavouring to conduct these the House of Commons Commission. The Committee in a way that limits duplication of work for those initially considered the House’s current practice providing shared services. in July 2018, and then in February 2019 in relation to updated guidance from the Law Society it was The integrity of the Annual Accounts considered that the House follows best practice in this area. In future, an annual report on the use 14. We have reviewed the Annual Accounts. of settlement agreements will be provided to the Committee. The Committee has continued to fulfil 15. We consider the Accounts acceptable for signature its responsibility with regard to the system of risk by the Accounting Officer. We are satisfied with the management. It has considered updates at each Annual Governance Statement and the process meeting, and has challenged management on these undertaken to produce it. in a number of areas. The work of the internal audit service 16. We note that Internal Audit completed its audit plan during the period, meeting its target. The Internal Audit team have benefitted from being fully resourced during the year. We note that the relationship between Internal Audit and RSM, the third party co-source provider appointed at the start of 2019, seems to have begun.

134 Annual Report of the Administration Estimate Audit and Risk Assurance Committee 17. We also welcome the continued close cooperation by Internal Audit with its colleagues in the House of Lords.

18. Overall we are satisfied that the scope and nature of the work of Internal Audit, supported by its partnership with RSM, and in parallel with the work of the NAO as the external auditors, adequately underpins the assessment of the Accounting Officer of the system of internal control.

The external audit by the external auditor 19. We are satisfied with the scope and nature of the work of the Comptroller and Auditor General (C&AG) and believe that the C&AG has carried out its external audit work with due independence. We are satisfied that there are no material unadjusted misstatements to report. The external auditors did not highlight any substantive weaknesses in financial control.

20. We have noted the contents of the letter of representation, which is standard, including the required disclosures on fraud and regularity.

21. We are satisfied that the audit opinion was appropriate.

Other matters as were referred to the Committee by either the Accounting Officer or the Commission

22. No other matters were referred to the Committee by the Accounting Officer or the Commission in 2018-19, in addition to the use of settlement agreements set out in paragraph 11.

Annual Report and Accounts 2018-19 135 Appendix

Terms of reference 1. The Committee has the following terms of reference, which are approved by the House of Commons Commission (the last changes were agreed in March 2017):

REMIT The Administration Estimate Audit and Risk Assurance Committee pursues its objectives and fulfils its responsibilities on behalf of the Commission and, as it deems appropriate, shall draw any matters arising within these terms of reference to the attention of the Commission.

MEMBERSHIP The membership of the Committee shall be: •• 3 MP members, including: –– A Member of the House of Commons Commission –– A Member of the Finance Committee

•• 3 external Members, appointed by the Commission The Chairman shall be appointed by the Commission from amongst the external members of the Committee.

QUORUM The quorum of the Committee shall be 3, including 1 MP and 1 external member.

OBJECTIVES The Committee supports the Accounting Officer in discharging his responsibilities under the Administration Estimate, particularly with regard to the maintenance of an effective system of internal control. The Committee also provides assurance to the Accounting Officer and the Commission that risk is being managed effectively by the organisation. The Committee’s objective is to give assurance to the Accounting Officer on:

•• The effectiveness of the system of governance, risk management and internal control (referred to collectively as the “system of internal control”) •• The integrity of the Annual Accounts •• The work of the internal audit service •• The external audit by the external auditor •• Other matters as may be referred to it by either the Accounting Officer or the Commission

136 Annual Report of the Administration Estimate Audit and Risk Assurance Committee RESPONSIBILITES Governance, Risk Management and Internal Control The Committee is responsible for reviewing governance, risk management and internal control (“the system of internal control”). This reviewing will include:

•• The effectiveness of the design and operation of the system of internal control •• The development and operation of the system of risk management, in accordance with the overall risk management policy •• The level and range of assurances on the management of risks •• The adequacy and implementation of proposed management actions to improve the effectiveness of internal controls

Annual Accounts The Committee is responsible for reviewing the Annual Accounts before their submission to the Accounting Officer. This review to include:

•• any significant changes in the accounting policies or treatments •• major financial reporting judgements or estimates •• consistency of the Annual Governance Statement •• resolution of any matters raised by the external auditor •• significant adjustments resulting from the audit by the external auditor

Internal Audit The Committee is responsible for monitoring the work of the internal audit service. This includes: •• Involvement in the appointment of the Director of Internal Audit and the audit partner •• Agreement to the annual internal audit plan and monitoring of progress •• Consideration of the results and findings from internal audit work and the adequacy of management responses •• Consideration of the Director of Internal Audit’s annual report and opinion

External Audit The Committee is responsible for monitoring and reviewing the work of the external audit. This review to include:

•• Recommendations on the appointment and scope of work of the external auditor •• Consideration of the external audit strategy •• The results of the external audit work, including any reports to those charged with responsibilities for governance, and the adequacy of management responses •• Representations made by management to the external auditor •• Annual review of the external auditor’s independence and effectiveness

Annual Report and Accounts 2018-19 137 Membership 2. The Committee is chaired by an external member, 7. The external members of the Committee held who is also an external member of the House of informal meetings with the House’s finance team Commons Commission. Dame Janet Gaymer DBE and the NAO to discuss the draft House of Commons chaired the Committee for the period 1 April to 31 Administration Estimate Annual Report and September 2018, when her term concluded. Accounts on 12 June 2019. Dr Rima Makarem succeeded as Chair on 1 October 2018. Jane McCall and Robert Scruton are the other Internal Audit two external members of the Committee. The MP members of the Committee are Sir Paul Beresford 8. The Committee routinely receives an oral report MP, Mr Clive Betts MP, and Rt Hon Tom Brake MP. at its meetings from the Head of Internal Audit The Membership of the Members Estimate Audit and Risk Management, together with a paper Committee (MEAC) is the same as that of showing progress against the annual work the AEARAC. programme, summaries of the main conclusions from completed audit assignments and the balance between core audit and the other work undertaken 3. The Clerk of the House, The Director General of the by Internal Audit. House of Commons, the Director of Finance, the Head of Internal Audit and officials from the National Audit Office also attend the Committee’s meetings. 9. At the beginning of the financial year, a lead These officials may withdraw for specific items at internal auditor was recruited, bringing the the Committee’s, or their own, request. team to its full complement. It is comprised of Dr Richard Stammers, Head of Internal Audit and Risk Management, the lead internal auditor, an internal 4. The Committee’s Secretary is the Private Secretary auditor and an audit trainee. to the Clerk of the House. 10. All qualified staff maintained their continuing Meetings professional development in the year. The Internal 5. The Committee met formally five times in the Audit team updated their self-assessment against financial year 2018-19: on 4 and 18 July, 16 October their professional standards and confirmed (jointly with the House of Lords Audit Committee) that a series of continuous improvements were and 5 December 2018, and 6 February 2019. being addressed.

6. In addition the Committee held an informal joint 11. RSM were appointed as the third party co-source seminar with the House of Lords Audit Committee provider at the start of 2019. RSM assisted in 2 audits to consider audit best practice on 5 March 2019. during the year, in relation to Key ICT controls and Risk Management, which made the most effective use of their specialist skills. Their support in relation Total number of to Risk Management avoided a potential conflict of Member meetings attended interest as the Head of the Internal Audit function Dame Janet Gaymer DBE 2/2 also leads the House’s risk management team. RSM (Chair, April-September 2018) also supported the internal audit team with access Dr Rima Makarem to resources and information and some counter 3/3 (Chair, October 2018 onwards) fraud work. Sir Paul Beresford MP 1/5 Mr Clive Betts MP 5/5 The Rt Hon Tom Brake MP 4/5 Jane McCall 5/5 Robert Scruton 5/5

138 Annual Report of the Administration Estimate Audit and Risk Assurance Committee Internal audits considered by the Committee Risk Management 12. During 2018-19 the Committee was notified of 9 16.  The Committee continued to fulfil its responsibility audits relating to the Administration Estimate, to review the development and operation of the including 4 audits from the 2017-18 work programme. system of risk management, in accordance with the Two further audits from the 2018-19 work programme overall risk management policy, and the level and were considered at the July 2019 meeting. Audit range of assurances on the management of risks. reports are usually considered first by the external members of the Committee, who may choose to 17.  The Committee provides formal assurance to the bring matters to the attention of the full Committee. Commission and the Accounting Officer that risks are being effectively managed by the organisation 13. Audits discussed by the Committee dealt with a wide and monitored by the Commons Executive Board range of topics, covering: (previously the Executive Committee). The Commons Executive Board (previously the Board) has day to a. The status of the internal control environment day responsibility for managing risk. across the house, particularly in HR, Research and Information, Participation and Security Internal audit charter b. Corporate issues, such as risk management, 18.  The Internal Audit service works to the Public Sector business continuity and counter fraud activity Internal Audit Standards professional framework. The House’s internal audit charter, sets out the c. The culture in In-House Services purpose, role, responsibility, status and authority d. The tracking of management closure of internal of internal auditing within the House of Commons audit actions, in relation to areas such as PMST and outlining the scope of internal audit work. and PDS This charter was revised in April 2016 and agreed by the Committee. e. The governance, progress, closure of audit actions and status of significant investment projects Planning of the audit programme across the estate 19. The Committee agreed the Internal Audit The Committee also followed-up implementation of programme for 2018-19 in March 2018. The agreed management actions. Committee agreed proposed changes to the programme in January 2018. 14. Internal Audit tracks the actions arising from its reports. The number of significant or fundamental External Auditors actions that have been completed or are 20. The National Audit Office (NAO) has continued to outstanding are reported to the Committee. provide an external audit function for the House In addition, the actions that are outstanding of Commons. NAO staff routinely attend meetings are specifically brought to the attention of the of the Committee and receive all of its papers and Committee, with a commentary on why they minutes, although the Committee continues from remain outstanding. time to time to discuss certain items of business without auditors present. 15. Further information on specific audits is included in the minutes of the Committee’s meetings which are 21. In December 2018 the Committee discussed the available on the Committee’s website. NAO’s planned approach to auditing the House of Commons Administration Estimate Annual Report and Accounts 2018-19. Other than the risks required to be presumed under ISA 240, the NAO raised significant risks in relation to the potential of fraud in revenue recognition and to the valuation of the Parliamentary Estate on the balance sheet.

Annual Report and Accounts 2018-19 139 22. The external members of the Committee met Further information about the Committee with the NAO and the Finance staff on 12 June 25. The two Audit Committees publish annual 2019 to discuss the draft House of Commons: reports and certain papers (agendas, minutes Administration Estimate Accounts for 2018-19. and actions arising) on their page on the Following this the accounts were discussed by the parliamentary website www.parliament.uk/ full Committee on 1 July 2019 prior to being signed business/committees/committees-a-z/other- off by the Clerk of the House, as Accounting Officer. committees/estimate-audit-committees/. House of Lords Audit Committee 23. The Committee held a joint meeting with the House of Lords Audit Committee in October 2018. The main items considered were Fire Safety compliance and mitigations and governance and assurance arrangements for the Restoration and Renewal of the Palace of Westminster. The Committee also continues to share agendas and minutes with the House of Lords Audit Committee.

Members Estimate Audit Committee 24. A Members Estimate Audit Committee was established by the House’s Members Estimate Committee on 14 June 2004. It has the same membership as the AEARAC and meets at the same time as the AEARAC. The annual report of the Members Estimate Audit Committee will be published with the House of Commons: Members Estimate Accounts 2018-19.

140 Annual Report of the Administration Estimate Audit and Risk Assurance Committee Annual Report and Accounts 2018-19 141 142 Annual Report of the Administration Estimate Audit and Risk assurance Committee Annual Report and Accounts 2018-19 143 144 Annual Report of the Administration Estimate Audit and Risk assurance Committee