Annual Report and Accounts 2016-17
HC 124
Department for International Trade Annual Report and Accounts 2016‑17 (for the year ended 31 March 2017)
Accounts presented to the House of Commons pursuant to Section 6(4) of the Government Resources and Accounts Act 2000. Annual Report presented to the House of Commons by Command of Her Majesty. Annual Report and Accounts presented to the House of Lords by Command of Her Majesty.
Ordered by the House of Commons to be printed on 19 July 2017
HC 124
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Contents
Foreword by the Secretary of State 6
Performance Report Overview Permanent Secretary’s Statement 7 Who we are 9 What we have done 12
Analysis Performance Report and Activities 18 Financial Review 20
Accountability Report Corporate Governance Report Lead Non‑Executive’s Report 23 Ministers and Departmental Board Members 24 Statement of Accounting Officer’s Responsibilities 26 Governance Statement 27 Other Public Interest Statements 37
Remuneration and Staff Report 39
Parliamentary Accountability and Audit Report Statement of Parliamentary Supply 52 The Certificate and Report of the Comptroller and Auditor General to the House of Commons 57
Financial Statements 59 6 Department for International Trade Annual Report and Accounts 2016-17
Foreword by the Secretary of State
The first year of the Department for International Trade’s (DIT) existence has been a remarkable one. An entirely new government Department has been created almost from scratch – the most significant reorganisation of Whitehall for many years. This report serves to highlight some of our achievements. We have begun work to establish the UK’s independent membership of the WTO, instigated 10 Trade Policy Working Groups with fifteen countries, contributed to an estimated £41.6 billion worth of additional exports and sustained over 91,000 jobs as a result of record levels of foreign direct investment into the UK. We should all be proud of the clear success of our Department in boosting Britain’s prosperity. Yet there is more to do; each of us in this Department shares the high ambitions for DIT and for Britain. The Department for International Trade has a vital mandate. For the first time, we have united all of the UK’s trade functions under one roof, with the task of developing and implementing this country’s newly independent trade policy. Britain has always been a great trading nation, and a global advocate of free and open trade. We have always recognised that commercial freedoms are not only the foundation of our national prosperity, but also create jobs, raise living standards, and liberate the world’s poor. That is why this Department is building a trade policy that works for everyone. This year, we will reconvene the Board of Trade, with a membership charged with unlocking the potential of every corner of the United Kingdom and we will appoint nine Her Majesty’s Trade Commissioners to lead export promotion, investment and trade policy overseas. Our active international engagement will not only attract the best international companies to UK soil, but also ensure that the highest-potential UK firms have the opportunity to expand and succeed globally, forging a new culture of exporting, and enhancing our international influence. I am exceptionally proud of DIT for all we have achieved so far. We have a clear vision for the future, and the means, drive and talent to realise it. Together, we can build a truly Global Britain.
The Rt Hon Dr Liam Fox MP Department for International Trade Annual Report and Accounts 2016-17 7
Performance Report Overview
Permanent Secretary’s Statement
The Department for International Trade (DIT) was created in July 2016 to promote British trade across the world. It has responsibility for developing, coordinating and delivering new trade policy across the globe; developing and negotiating trade and market access deals with non-EU countries; negotiating plurilateral trade agreements; supporting the UK’s WTO membership and representation; and facilitating inward and outward investment. For the first time, the UK has brought together expertise charged with financing and promoting international trade and investment, and championing free trade, under one Secretary of State. Since the Department was set up, we have moved swiftly to put in place the necessary governance, people, and legal and financial functions. At the same time, DIT has quickly established and strengthened working relationships across Whitehall, with its international counterparts, and with businesses. This is the Department’s first Annual Report and Accounts. Over the period since it was formed, the Department has increased in headcount by more than 20% to a global workforce of over 3,000 people; launched great.gov.uk, which has attracted over 2.4 million site visits; supported UK businesses to attend over 600 events including the British House at the Olympic and Paralympic Games in Rio; and worked through its international network to attract and retain a record amount of foreign investment to the UK. DIT has also taken its place at the centre of global Britain, taking on responsibility for the government-wide GREAT Britain campaign, which encourages people to visit, do business, invest and study in the UK. In our first year, we have made significant progress in building the capabilities the Department will need to deliver its challenging agenda ahead, and created an engaged, expert, entrepreneurial and inclusive environment in which to work. I took up post as Permanent Secretary on 27 March 2017. On behalf of the team, I am proud of all we have achieved since DIT was established, and I am enthused about the task ahead.
Antonia Romeo 8 Department for International Trade Annual Report and Accounts 2016-17 Department for International Trade Annual Report and Accounts 2016-17 9 Who we are
Our vision
The Department for International Trade (DIT) helps to secure UK and global Strategic objectives prosperity through free trade, greater investment and increased exports. The Department for International The Department is responsible both for promoting and financing UK trade and Trade is responsible for delivering investment, and for developing and negotiating the international trade rules within a new trade policy framework which British businesses will operate once the UK leaves the EU. for the UK, and promoting and financing British trade and Our people across the UK and overseas help UK businesses to reach their investment across the world, full potential by maximising the benefits that flow from trade and investment to ensure Britain is firmly at the opportunities. forefront of global trade and We provide a broad range of support for potential exporters in the UK, as well as investment. Our ultimate aim is building the global appetite for British goods and services. We champion the UK to drive UK and global prosperity abroad to potential investors, and work closely with Whitehall partners to promote through free trade, exports and development through investment in emerging economies. investment. To achieve this, the Department’s strategic objectives Organisational structure are to: The Department for International Trade (DIT) was established on 13 July 2016. • Promote and provide support The creation of DIT brought together expertise on trade policy, trade promotion, to UK exports, offering a investment and export finance from four existing organisations: UK Trade & Investment, range of business support Trade Policy team from the former Department for Business, Innovation and Skills, the that includes export finance GREAT Britain campaign from the Cabinet Office, and UK Export Finance. and insurance, to grow an The new Department is focused on using this expertise to ensure the UK is firmly at economy that works for the forefront of global trade and investment. everyone; DIT is organised into the following directorates: • Maximise opportunities for wealth creation through • International Trade and Investment (ITI) drives growth in the value of UK supporting Foreign Direct exports, and supports investment into and out of the UK. We work with Investment and Outward Direct businesses and industry leaders at home and abroad, to support businesses Investment; to export, to promote UK goods and services overseas and to maximise investment. We drive government strategy on how we can support trade • Deliver the best international for each industry sector. ITI also works in collaboration with the Devolved trading framework for the Administrations to help promote the UK’s exporting capability as a whole. whole of the UK to maximise global trade and investment • Trade Policy Group (TPG) is responsible for delivering the best international opportunities; and trading framework for the whole of the UK to maximise global trade and investment opportunities. In developing and delivering the international trading • Build the global appetite for framework we are committed to: British goods and services and encourage more people – Leading by example through our open economy and pursuit of free trade; to visit, study, invest in and do business with the UK through – Developing, supporting and enforcing a fair, proportionate rules‑based system for trade; the GREAT Britain campaign.
– Developing a trade agenda which supports foreign policy, security, and development goals; and
– Developing a trade agenda that is inclusive and transparent. 10 Department for International Trade Annual Report and Accounts 2016-17
The GREAT Campaign works with government departments across Whitehall to raise the profile and reputation of the UK abroad
• The GREAT Campaign works with government departments across Whitehall to raise the profile and reputation of the UK abroad. This sustains demand for British goods and attracts investment which strengthens our economy. • UK Export Finance (UKEF) is the UK’s export credit agency, which works to ensure that no viable UK export fails for lack of finance or insurance from the private sector, while operating at no net cost to the taxpayer. UKEF operates under its own Act of Parliament, and under consent from HM Treasury and has its own Parliamentary Vote. It operates as a separate government department reporting to the Secretary of State for International Trade, but is strategically and operationally aligned with the Department for International Trade, and UKEF’s CEO reports for line management purposes to the Permanent Secretary of DIT. DIT staff are located in 174 posts in 108 countries and provide tailored support and advice for businesses of all sizes. The Department’s overseas network is located in British embassies, High Commissions and consulates across the world, allowing DIT and Foreign and Commonwealth Office staff to work together to secure the best outcomes for British businesses. This Annual Report and Accounts includes the finances and performance of the constituent parts of DIT – ITI, TPG and the GREAT Campaign – for the whole financial year. Prior year comparatives have been restated to report as if the Department has always existed in its current form. The finances and performance of UKEF are reported separately in UKEF’s own Annual Report and Accounts.
UKEF AND DIT SUPPORTS BIWATER CONTRACT WITH KURDISTAN REGIONAL GOVERNMENT In 2015, UK exporter Biwater secured a contract with the Kurdistan Regional Government to work on a project providing water treatment solutions for the cities Erbil and Sulaymaniyah in the Kurdistan region of Iraq. The project aims to alleviate the strain on the existing infrastructure in the region, reduce its reliance on dwindling groundwater reserves, and ultimately deliver long-lasting environmental benefits. To finance the preliminary scoping phase of the project carried out by Biwater in 2016 – including social and environmental impact assessments, relevant site surveys and detailed designs – UKEF was able to provide a US$34.8m loan to the Kurdistan Regional Government under its direct lending facility. This was the first time an export credit agency provided a loan to a regional government in Iraq. Collaboration across DIT and with other Government colleagues in Erbil and Baghdad played a crucial role in the success of the transaction. As well as co-ordinating initial contact between UKEF and Kurdistan Regional Government representatives, DIT staff acted as essential liaisons in the country, using their regional expertise to ensure UKEF visits ran smoothly, safely and were able to make the fullest use of their time. Department for International Trade Annual Report and Accounts 2016-17 11
DIT staff are located in 174 posts across 108 countries and provide tailored support and advice for businesses of all sizes 12 Department for International Trade Annual Report and Accounts 2016-17
What we have done
Trade Policy Since the Department’s creation, we have focused on building the talent, capacity and capabilities required to deliver a world class trade negotiation function for the UK. A core part of this has been more than quadrupling the number of people working within the trade policy team over 2016‑17. DIT and the Foreign and Commonwealth Office (FCO) have jointly launched the Trade Policy 10 Trade Policy and Negotiations Faculty to deliver high quality training to officials across Whitehall. We will continue to build on this work in 2017‑18 to working groups put in place the best possible team to create an independent trade policy for the UK for the first time in over four decades. DIT is working closely with the Department for Exiting the EU (DExEU) as we contribute our trade policy expertise to preparations and negotiations for our exit. We are planning and preparing the necessary legislation and operational frameworks required in order to manage our trade policy when we leave the EU. Since July 2016, DIT has established a series of working groups and high‑level dialogues to explore how we progress our trade and investment relationships. Ten trade policy working groups have been announced with the Cooperation Council for the Arab States of the Gulf, Australia, China, Israel, India, New Zealand, Norway, Turkey, South Korea and the USA. Where there are existing trade agreements between the EU and third countries we are exploring how these can be transitioned to bilateral agreements with the UK once we have left the EU. This year the Trade Policy Group has continued to engage with the G20 to shape the wider international trade agenda, and has worked to fulfil the UK’s role in promoting the European Union’s trade agenda In 2016‑17 UK while we remain a member. Work also started to establish the UK’s independent membership of the World Trade Organisation (WTO), businesses have building the UK capability to play a full and active role. On 22 February the ground‑breaking WTO Trade Facilitation Agreement came into force. told us that we The UK fully supported this historic agreement to simplify, modernise and harmonise import and export processes – making it easier to trade have assisted across borders. In order to promote global security through strategic export controls and them to achieve facilitate responsible exports, the Export Control Joint Unit (ECJU) began operations in July, bringing together operational and policy expertise from exports valued at the Department for International Trade’s Export Control Organisation (ECO), the FCO and the Ministry Of Defence (MoD). £41.6 billion Department for International Trade Annual Report and Accounts 2016-17 13
What we have done
Exporters DIT’s e‑exporting programme helps UK companies sell their products and In 2016‑17, UK businesses have told us services to millions of global customers that we have significantly assisted them and grow their business through online to achieve exports valued at an estimated exports. We have negotiated preferential £41.6 billion. rates for 15 e‑marketplaces, reducing the Our new ‘demand led’ operating model costs of selling through these platforms aligns teams at our overseas posts, for UK businesses. In 2016‑17, our who are responsible for finding and new ‘Selling online overseas’ tool was creating demand for British goods and launched enabling UK companies to set services, with our sector teams in the up on e‑marketplaces and identify major UK who work to build the supply of new marketplaces around the world to export ready businesses. DIT works sell through. across the whole of the UK to provide In November 2016, we launched support to businesses to overcome great.gov.uk, a new digital platform that the barriers to exporting. We are acts as a single destination for trade and developing and expanding the range investment services and connects UK of products and services we provide businesses with international buyers to encourage UK businesses to start, and investors. Companies can access increase or sustain their exporting practical advice and a suite of new activity. services to help them export. There have been over 2.4 million unique visitors to the site since it launched, and over 37,900 responses to export opportunities. In addition, over 3,204 companies have signed up to ‘Find a Buyer’ service which links UK companies to buyers overseas.
ONLINE MARKETPLACES PROPEL FREESTYLEXTREME FreestyleXtreme is an action sports retailer with offices and a distribution centre in Bristol. Within seven years, they have grown from a team of 8 people to over 70 staff, with a projected annual turnover of over £20m. They credit e-marketplaces as a fundamental part of their growth. We have They had assistance from the Department for International Trade (DIT), who negotiated helped them set up a local cooperative to reduce international shipping costs. They are also in the process of appointing an in-country partner, who preferential will help launch on leading Chinese and South East Asian e-marketplaces. rates for 15 e -marketplaces 14 Department for International Trade Annual Report and Accounts 2016-17
BUILDING RELATIONS WITH CHINA The growing commercial relationship between the UK and China offers the opportunity to expand trade and investment between the two countries. In 2016, Chinese state-owned construction company CNBM announced a £2.5 billion investment to help tackle the UK’s housing shortage. The project will see CNBM build six factories across the UK. This year also saw our new Capital Investment Unit launch the China‑UK Infrastructure Academy together with the Bartlett School at University College London. This major new initiative will help train Chinese companies and officials on investment processes in the UK and so encourage greater Chinese investment in UK infrastructure projects.
Defence & Security Organisation Attracting foreign The DIT Northern Powerhouse (NPH) Team works to promote the North at DIT’s Defence & Security Organisation investment into the UK home and overseas in order to attract (DSO) has helped the UK defence and inward investment and boost exports. security industry increase exports by DIT supports foreign companies to The team also works across government building relationships with overseas establish and grow business in the to collectively promote the North. The governments, raising awareness of UK UK by identifying and supporting high NPH team hosted a number of incoming industry capabilities, and co‑ordinating value investment opportunities. Our missions for officials and potential UK Government support for export investment services team provides investors, including from delegations opportunities in overseas markets. investors with services to facilitate from the US, Latin America, and the During 2016‑17, DSO and other partners their entry and retention into the UK. Mediterranean region, to increase their continued to help UK defence and In 2016‑17, DIT and its partners helped knowledge of the market opportunities security companies achieve success deliver 1,859 Inward Investment projects available in the North. The Team brought internationally. DSO delivered a global to the UK, which represents a 7% 63 international delegates from 22 programme of 28 overseas defence increase on 2015‑16. countries to Innovate 2016 in Manchester, and security exhibitions during the DIT also installed the first ever and showcased new technologies and financial year and hosted 60 delegations UK pavilion at MIPIM (Le marché innovation opportunities across the North. from 35 countries at the Farnborough international des professionnels de International Airshow during July 2016. l’immobilier) in Cannes this year. This The Department’s Venture Capital team global real estate fair was attended by helps promote and drive investment more than 5,000 investors from over into innovative UK businesses. Our 90 countries. The UK pavilion hosted digital platform, great.gov.uk, has a new over 25 events, including the launch of investment service, ‘Invest in GREAT a portfolio of 19 projects showcasing Britain and Northern Ireland’, that links some of the most exciting investment overseas investors to UK opportunities. opportunities across the Midlands It is supported by a comprehensive region to international investors. marketing programme overseas, and there have been over 670,000 unique visitors to investment pages on great.gov.uk.
SOMERSET’S SUPERACT LEADS URBAN INNOVATION ACROSS EUROPE AND CANADA Somerset-based not-for-profit organisation, Superact, has tapped into its eleven year international expertise to secure a deal to lead Future DiverCities, a four year project to promote urban innovation and cultural diversity across Europe and Canada. A 10-partner project across two continents, Future DiverCities is working to support new and emerging new media and urban artists to engage with challenging urban issues and share the creative process with new communities and non-mainstream audiences. Community interest company, Superact works with people in healthcare, education and the criminal justice system to gain access to arts-based projects and initiatives to improve the health and wellbeing of communities in the UK and internationally. Founded in 2006, Superact started out delivering small, community projects across the South West and in Bristol. Now, the 14-strong team leads on projects across the UK, Europe, India and Thailand. Throughout this time, the company has worked closely with the Department for International Trade (DIT) to develop the skills and contacts needed to build an effective export strategy, and credits DIT for encouraging them to think ‘bigger’ than just the UK market. Department for International Trade Annual Report and Accounts 2016-17 15
Promoting the UK abroad In March 2017, the UK and Malta co- Trade Envoys and Business hosted the inaugural Commonwealth Ambassadors GREAT Britain Trade Ministers’ Meeting in London. The The Trade Envoy programme supports Meeting brought together politicians, The GREAT Campaign works to the Government’s goals of promoting UK officials and policymakers from over encourage the world to visit, study and exports and inward investment. Envoys 35 Commonwealth nations to promote do business with the UK, generating are selected for their experience, skills greater trade and investment within the jobs and growth for the UK. It is active and knowledge of a particular sector or Commonwealth. in over 144 countries. This year saw market and work on an unpaid basis, the first full year of operation for the In the summer of 2016, the British to support the Government’s overall ‘Exporting is GREAT’ initiative, which House at the Olympic and Paralympic strategy to drive economic growth. There aims to encourage businesses to Games in Rio showcased UK business, are currently 20 Trade Envoys, covering consider and start exporting. In January culture, sport and tourism, and 40 markets. In 2016‑17 they undertook 2017, DIT launched two new targeted welcomed almost 6,000 international over 50 visits worldwide. international campaigns under the guests and senior global business The Business Ambassadors network GREAT brand with the aim of increasing leaders – including the CEOs of WPP, consists of 44 senior business leaders. inward investment and the demand for Deloitte and the Financial Times. UK Exports globally. They act as powerful advocates for the UK abroad, promoting UK goods and Visits and Events services, and helping to secure inward Our teams promote UK exports investment to the UK. For example in and inward investment at a range of January 2017, Business Ambassador international events. This year these have Lord Kakkar (Health and Life Sciences) included the inaugural Commonwealth and Health Minister Nicola Blackwood Trade Ministers’ Meeting, the British led a high level UK delegation of clinical House at the Rio Olympic and Paralympic institutions, academics and life science Games, and the Qatar‑UK Business companies to Dubai for the Arab Health Forum. 2017 Exhibition and Congress. The visit promoted UK expertise and showcased In the UK, the two‑day Qatar‑UK a full range of products and services. Business Forum, led by the Secretary of State, brought together Ministers and senior government representatives from both countries, to encourage trade and investment. During the Forum, it was announced that Qatar will invest £5 billion across the whole of the UK. 16 Department for International Trade Annual Report and Accounts 2016-17
Our Ministers our commercial relationship and the creation of a UK‑Argentina Commercial In the past year DIT has organised 83 Dialogue. ministerial visits to 46 priority markets, to strengthen trading relationships, promote The Department is determined to ensure the UK as a destination for foreign that all nations and regions of the UK investment and help grow demand for UK benefit from trade opportunities and DIT exports. International Trade Secretary, ministers made 35 visits to the English Dr Liam Fox MP, visited 14 markets regions and Devolved Administrations last year, including India where he met last year. In March, DIT organised the first The GREAT with business leaders and technology Midlands Engine Trade Summit, where entrepreneurs to showcase UK expertise Parliamentary Under Secretary of State campaign and innovation. Mark Garnier MP showcased a range of investment opportunities in the region is active in over The Secretary of State also visited and announced 28 new Midlands ‘Export Germany, Switzerland, Brazil, Vietnam, Champions’ as part of a programme to 144 countries Qatar and the USA. On his visit to the encourage and inspire businesses to USA, the Secretary of State travelled export internationally. The 28 high profile to Chicago and Los Angeles where he business leaders from across the region met with investors Boeing, Caterpillar are offering the expertise and advice to and AEG. In Brazil, he co‑chaired the inspire companies to export for the first UK‑Brazil Joint Economic and Trade time and to support existing exporters Committee, and during two visits to looking to expand into new markets. Germany he held roundtables with businesses and German industry bodies delivering the message that the UK remained committed to the success of the EU as a strong trading partner. Ahead of the G20 trade ministers meeting in Shanghai, the Minister for Trade Policy, Lord Price, met government officials, business representatives and investors in China and Hong Kong leading to major commitments from Chinese conglomerates, including Fosun and Huawei, on inward investment to the UK. The Minister for Trade and Investment, Greg Hands MP’s visit to Argentina in March 2017 led to the announcement of a package of measures to boost
The British House at the Olympic and Paralympic Games in Rio welcomed almost 6,000 international guests Department for International Trade Annual Report and Accounts 2016-17 17
Working across Government Trade is a key part of the Government’s wider agenda and as such, the Department for International Trade works closely with other government departments as part of a whole of government approach. • Making the most of the opportunities that we have in trade is critical to making a success of Brexit, and we are working with the Department for Exiting the European Union (DExEU) to contribute our trade policy expertise to input into DExEU’s preparations and negotiations. • Trade acts as an enabler for prosperity across the world and as such we work closely with the Department for International Development to support the Government’s development objectives, helping to bring prosperity to developing countries. • DIT will continue to work closely with FCO, DFID and others, to ensure UK business is ready to compete for the opportunities created by the Cross- Whitehall Prosperity Fund. • We are working closely with the Department for Business, Energy and Industrial Strategy, with trade and investment as a key pillar of the Industrial Strategy. • Our role spreads even further across Whitehall, through the GREAT campaign which works with 23 government departments to raise the profile and reputation of Global Britain. This sustains demand for British goods and attracts investment which strengthens our economy. A summary of the risks facing DIT in 2016-17 is included in the Governance statement on page 33. 18 Department for International Trade Annual Report and Accounts 2016-17
Performance Report and Activities
Analysis Performance Metrics The UK is operating against a backdrop of weak international trade growth. In 2016 the volume of world trade grew by only 1.3%, slower than the 2.3% expansion in global output. The World Trade Organisation is projecting a gradual pick‑up in trade, with global volumes expected to increase by between 1.8% and 3.6% in 2017, before rising further to between 2.1% and 4% in 20181. However, there is continued uncertainty about prospects for global trade reflecting the unpredictable direction of the global economy. Global Foreign Direct Investment (FDI) flows fell 13% in 2016, as global economic growth and world trade remained weak. The projected recovery in global output and trade is expected to lead to an increase in FDI flows in 2017, but as with trade, uncertainties continue2. We measure the impact of our work by the business performance of the exporters we serve and investments delivered. Our objectives are to drive up the number of exporting UK companies as well as the overall value of UK exports and to maximise inward and outward investment. However, 2016‑17, has been a transitional year with performance measured using metrics agreed through legacy frameworks, while we review and refresh both our targets and key performance indicators to best reflect the objectives of the new Department. Analysis of UKEF’s performance in 2016‑17 is reported in the UKEF Annual Report and Accounts. Through 2016-17 our support for export performance was focused on ensuring that we were as aligned as possible to the then HMG manifesto commitments: the Parliamentary ambition of £1 trillion exports and 100,000 more exporters by 2020. Our measures were focused on maximising export value for our customers. We worked across our Under Secretary of network and with partners to promote the UK as a destination for investment. Our support was aligned to the HMG manifesto commitment to maintain the UK’s leading position as a location for investment in Europe. State Mark Garnier The tables below show the results DIT has achieved against its key performance MP showcased indicators for trade development and inward investment promotion for 2016-17. a range of Trade 2016-17 Overall investment Target outcome opportunities in Value of our customers’ export wins3 £26 bn £41.6 bn New exporters supported to achieve export wins4 2,000 2,811 the region and Investment 2016-17 announced 28 Number of involved inward investment successes 1,685 1,859 new Midlands ‘Export Champions’
1 Source: WTO Press/793 Trade Statistics and Outlook, April 2017 https://www.wto.org/english/news_e/pres17_e/pr791_e.htm 2 Source: Global Investment Trends Monitor No.25, February 2017 http://unctad.org/en/PublicationsLibrary/webdiaeia2017d1_en.pdf 3 ‘Export wins’ is a new, exploratory metric that will be developed further in 2017-18. The metric captures the customer’s expected export value and not actual value over a 5-year period. The metric only captures customers we have assisted who have realised a deal, not those we have worked with but have not reached a deal. As this is a new and exploratory measure, a systematic validation process is being developed. 4 A new exporter is a business that did not export in the previous 12 months. Our teams in the English Regions provide the majority of the direct support to new exporters. Department for International Trade Annual Report and Accounts 2016-17 19
Making the most of the opportunities that we have in trade is critical to making a success of Brexit
Exports DIT staff in the UK and overseas deliver a range of services to help companies export. We target those markets and sectors where the opportunities are greatest and help companies make their mark abroad. UK companies tell us that in the financial year 2016-17, DIT provided significant support for an estimated £41.6 billion of export wins. Inward Investment The EY attractiveness Survey 2017 showed the UK remained the destination of choice in Europe for FDI – based on project numbers1. The investment results for 2016‑17 show an improvement in performance from the previous year, with DIT and its partners helping deliver 1,859 successful inward investment projects in 2016‑17, a 7% increase on 2015‑16.
1 Source: UK Attractiveness Survey 2017, May 2017 http://www.ey.com/uk/en/issues/business-environment/ey-uk- attractiveness-survey 20 Department for International Trade Annual Report and Accounts 2016-17
Financial Review
Introduction This financial review records Our total budget for 2016‑17 is shown in information on the use of resources the table below: voted by Parliament directly to DIT via the Supply Estimates process. Prior year comparatives are Figure 1: Table of Total Budget 2016‑17 provided in brackets. DIT Revised Baseline Allocation (£m) 2016‑17 Scope of the Accounts £m UKTI 326 The Financial Statements for the year to 31 March 2017, (on pages 59 to 78), TPG 17 and also the Statement of Parliamentary GREAT 4 Supply with associated schedules DIT Baseline 347 (on pages 52 to 56) cover the new Department, which brought together the Additional Autumn Funding Statement 8 former UK Trade & Investment (UKTI, MoG transfer from BEIS and the FCO 9 a non‑ministerial department with joint New DIT Baseline 364 reporting links to the former Department for Business, Innovation and Skills (BIS) and the FCO), the Trade Policy unit – Our funding for the year was based from former BIS, and the GREAT Britain on the baseline budgets of UKTI, TPG programme team from the Cabinet and GREAT agreed through the 2015 Office. Spending Review. Additional funding, Machinery of Government Changes totalling £8.6m, was transferred from BEIS and the FCO through the The creation of the new Department Supplementary Estimates process, to was announced in July 2016, and it fund the corporate services, Ministerial became a formal legal entity in November offices and estates of the new 2016. In accordance with HM Treasury Department. Additional HM Treasury accounting rules for Machinery of funding of £7.9m was announced through Government changes our accounts the 2016 Autumn Statement for the reflect each of the transferring functions expansion of TPG and to fund the one off – UKTI, Trade Policy Group (TPG) and costs of creating a new Department. the GREAT programme team – from the start of the financial year. Prior year Outturn for the year comparatives have also been restated to All three main categories of spend came include the transferring functions of the in below the control totals – Resource Department. DEL by £6.7m, Resource AME by £3.0m Funding for the year 2016‑17 and Capital by £3.5m. This is also confirmed in the tables in the Statement As with other Ministerial Government of Parliamentary Supply and associated Departments, our operations are almost notes (on pages 52 to 56). The sections entirely funded by an Exchequer grant, below give an analysis of the programme, voted by Parliament by means of the administration and capital budgets. Department’s submission of expenditure ‘Estimates’ which have been agreed by The administration budget funds the HM Treasury. In the accounts, the net corporate service functions of DIT, the grant is shown as ‘From Consolidated Ministerial Strategy Directorate and the Fund (Supply)’. This is the cash payment policy work of TPG. All other DIT activity for our capital and resource expenditure is considered to be front-line delivery for the year, less adjustments for and is therefore classified as programme non‑cash items, such as depreciation, activity. and for balance sheet movements. Department for International Trade Annual Report and Accounts 2016-17 21
Table 2: Outturn for the year 2016-17 Budget Budget Actual Variance £m £m Administration 35.3 29.7 5.6 Programme 316.1 315.0 1.1 Total Resource DEL 351.4 344.7 6.7 Resource AME 3.0 – 3.0 Capital 9.8 6.3 3.5 Total Budget 364.2 351.0 13.2
Resource DEL Expenditure The table below shows the Department’s resource DEL expenditure budget, outturn and variance for the year.
Figure 3: Table of DIT Expenditure Against Budget 2016-17 Business Area Budget Actual Variance £m £m £m International Trade and Investment 263.7 260.6 3.1 Centrally Managed 47.1 43.5 3.6 Trade Policy Group 17.2 17.1 0.1 GREAT 4.0 4.0 0 Corporate Services and Ministerial Strategy 19.4 19.5 (0.1) Total 351.4 344.7 6.7
In 2016‑17 DIT’s net resource spend was The £3.6m underspend against the £344.7m (2015-16 £341.2m), resulting Centrally Managed budget reflects the in an overall underspend of £6.7m. The underspends identified through our main elements of underspend are set out quarter three review process and then below: transferred to a central budget to allow DIT to reprioritise as needed. These relate The £3.1m underspend in ITI largely to delays in our recruitment plans for relates to staff vacancies across our TPG and DIT Corporate Services. This overseas network which meant that budget also includes the annual charge outturn for the network was £1.5m below for our use of the overseas FCO platform budget. There was also an underspend and includes services such as estates, of £0.5m across the portfolio of digital I.T. and security for DIT staff at overseas projects in progress in 2016‑17. posts. This was £43.5m in 2016-17. 22 Department for International Trade Annual Report and Accounts 2016-17
Capital expenditure Annually Managed Expenditure Outturn was £6.3m against a budget DIT has an annually managed of £9.8m. The underspend of £3.5m expenditure limit (AME) of £3m to relates to the deferral of some planned cover potential provisions relating to digital and estates activity into the next incentivised contract payments. This financial year due to the timing of DIT year no such provision was made as DIT transition. The capital spend this expects performance targets to be met year included: and so incentive payments were accrued rather than provided for, as at 31 March • £2.7m related to the development 2017. of the new great.gov.uk website which launched in November Income Received 2016. The site is the Government’s £4.2m (2015-16 £6.5m) of income was single destination for information received in 2016‑17. This income largely on UK trade and investment, and consisted of fees and charges for will become the main route for events, sponsorship and the Overseas businesses to access help and Market Introduction Service (OMIS). The advice, source export opportunities, reduction in comparison with 2015‑16 and sell products and services was due to a fall in sponsorship income online. received, and a continued drop in OMIS • £1.7m for the development of the income. The fall in OMIS income was due new customer information database to a change in strategy which focused for DIT, due for launch in 2017‑18. overseas posts on the work that can add The database will enable better the greatest value to the UK economy management of our relationships rather than on targets for wider revenue with UK businesses through generation for the Department. The aggregation of data held by DIT Department is currently reviewing its and other government partners income policy. about a given company. DIT will be Future Budgets able to track real‑time performance information about exports and The total budget for DIT in 2017-18 has investments. been agreed as £373.9m – consisting of £364.3m Resource DEL £3.0m AME and • £1.8m on the updated online export £6.7m capital. Further details of future licensing tool, due to be launched year budgets are included in the core in 2017‑18. This tool will allow tables in Annex B. companies to apply online for an export or trade license.
Antonia Romeo Accounting Officer 11 July 2017 Department for International Trade Annual Report and Accounts 2016-17 23
Accountability Report
Corporate Governance Report Lead Non‑Executive’s Report the creation of DIT, each sector kept With Ministers and Executives, we have delivering service as usual, arranging come together monthly to support and I was honoured to have been appointed over 100 international visits, launching challenge the work of the Department by the Secretary of State as the first great.gov.uk and substantially enhancing as it develops at pace. Discussions Lead Non‑Executive Board Member of the UK’s trade policy capability. have included cyber security issues, the the Department for International Trade. roll‑out of great.gov.uk, and the future The inception of a new government Three further Non-Executive members of the Overseas Network. These are department inevitably poses challenges have been appointed to the Departmental key aspects of our mission to enhance as well as opportunities: these are much Board: Julie Currie, who brings a wealth exports and investment at a time of major magnified by the pivotal nature of the of experience from Lloyds Banking change. choices facing the UK economy. As Group and the Lloyds Bank Foundation, a strong supporter of free trade, I am who chairs the Audit and Risk Assurance I thank all of the Board, including the delighted to have a role in setting up a Committee; Dr Pippa Malmgren, who has Secretary of State and Ministers, for their department focused solely on trade. a strong background in economic and support and the importance they have trade policy; and Noel Harwerth, whose placed on the Board’s role. Sir Martin The Department has come a long way extensive finance sector experience will Donnelly’s leadership throughout the since it was formed in July 2016. At that ensure rigorous oversight of UK Export transition has put us in a strong position point, trade gained an elevated profile Finance. to develop and deliver. I welcome Antonia and a seat in Cabinet, reflecting the Romeo, his successor as Permanent importance that the new Prime Minister My role as Lead Non‑Executive, is to Secretary, and look forward to building attaches to improving the global trading bring together my fellow Non-Executive on the Department’s excellent start as we outcome for the country. Three separate Board members to provide constructive work to maximise free and open trading parts of government – UK Trade and independent challenge and to improve relationships. Investment, UK Export Finance and the wider government co‑ordination. Over Business Department’s Trade Policy the past six months we have been closely Group – were brought together under involved in the development of the Single one Secretary of State. Throughout Departmental Plan which sets out the Department’s function and operations.
Simon Walker CBE Lead Non‑Executive Officer 24 Department for International Trade Annual Report and Accounts 2016-17
Ministers and Departmental Board Members
Dr Liam Fox (from 13 July 2016) The Lord Price (from 16 July 2016) Secretary of State is in overall charge Minister of State for Trade Policy leads of all policies and sectors, both directly the Trade Policy Unit, which leads for the and through his Ministers. He will Department on developing, coordinating personally lead on the defence and and delivering a new trade and investment security sector and will be involved in policy. This includes our dealings with the most significant global deals across the World Trade Organisation, and other all sectors. bilateral and multilateral partners.
Greg Hands MP (from 15 July 2016) Mark Garnier MP (from 17 July 2016) Minister of State for Trade and Investment Parliamentary Under Secretary leads leads on trade and investment promotion on trade and investment promotion in five sectors: technology & smart cities, in five sectors: financial services, infrastructure, energy, healthcare and advanced manufacturing and aerospace, life sciences. He is also be leading on: automotive, bio‑economy and consumer, cross‑Whitehall alignment; business creative & education. He also leads planning of the Department’s trade and our work with the Export Control investment promotion work; economic Organisation, and our work to help more diplomacy and the prosperity fund; UK businesses become exporters. Export Finance; and policy direction on topics such as mergers and acquisitions and Outward Direct Investment (ODI). Department for International Trade Annual Report and Accounts 2016-17 25
Departmental Board Non‑executive Board Members Members
Antonia Romeo Catherine Raines Simon Walker Permanent Secretary DIT Director General of International Trade Simon Walker CBE was appointed as (From 27 March 2017) and Investment (From 13 July 2016) lead Non‑Executive Board member of the Department for International Trade in November 2016.
Sir Martin Donnelly Louis Taylor Permanent Secretary DIT UKEF Chief Executive (From 13 July to 26 March 2017) (From 13 July 2016) Dr Pippa Malmgren Dr Pippa Malmgren was appointed as a Non‑Executive Board Member of the Department for International Trade in November 2016.
John Alty Alison Currie Director General of Trade Policy DIT Director of Finance and Corporate (From 14 July 2016) Services (From 1 August 2016) Further details on the DIT Departmental Julie Currie Board and its Committees are included in Julie Currie was appointed as a the Governance Statement. Non‑Executive Board member of the Department for International Trade in November 2016. As part of her role she is also Chair of the Audit and Risk Assurance Committee.
Noël Harwerth Noël Harwerth was appointed as Non‑Executive Chair of UK Export Finance in January 2017. As part of this role, she also took up a Non-Executive Details of the register of interests maintained for Board Members is included on role on the DIT Departmental Board. page 29 of the Governance Statement. 26 Department for International Trade Annual Report and Accounts 2016-17
Statement of Accounting Officer’s Responsibilities Under the Government Resources and Accounts Act 2000, HM Treasury has directed DIT to prepare for each financial year resource accounts detailing the resources acquired, held or disposed of by the Department during the year, and the use of resource by the Department during the year. The accounts are prepared on an accruals basis, and must give a true and fair view of the state of affairs of DIT, and of its net resource outturn, application of resources, changes in taxpayers’ equity, and cash flows for the financial year. In preparing the accounts, the Accounting Officer is required to comply with the requirements of the Government Financial Reporting Manual, and in particular to: • observe the Accounts Direction issued by HM Treasury, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis; • make judgements and estimates on a reasonable basis; • state whether applicable accounting standards as set out in the Government Financial Reporting Manual have been followed, and disclose and explain any material departures in the Accounts; and • prepare the Accounts on a going concern basis. HM Treasury has appointed the Permanent Head of the Department as Accounting Officer of DIT. The responsibilities of an Accounting Officer, including responsibility for the propriety and regularity of the public finances for which the Accounting Officer is answerable, for keeping proper records, and for safeguarding DIT’s assets, are set out in Managing Public Money published by HM Treasury. Accounting Officer’s confirmation As Accounting Officer, as far as I am aware, there is no relevant audit information of which the Department’s auditors are unaware. I have taken all of the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the Department’s auditors are aware of that information. I have sought the necessary assurances from BEIS and the Cabinet Office who have held responsibilities for functions transferred to DIT in 2016-17. Further details of these assurances are provided in the Governance Statement on page 36. The annual report and accounts as a whole is fair, balanced and understandable, and I take personal responsibility for the annual report and accounts, and the judgements required for determining that it is fair, balanced and understandable. Department for International Trade Annual Report and Accounts 2016-17 27
Governance Statement 1. Introduction This is the Department’s first annual Governance Statement since its creation in July 2016. It sets out the governance, risk management and internal control arrangements that have operated within the Department from its creation to 31 March 2017, and accords with HM Treasury guidance. The Department for International Trade was created on 13 July 2016 and gained legal recognition as a department on 9 November 2016. The Department brings together existing expertise on trade policy, promotion and export finance by integrating UK Trade & Investment, the GREAT campaign, UK Export Finance and the Trade Policy Group that was built on existing capability from the former Department for Business, Innovation and Skills. Our aim over the year has been to create a strong and cohesive Department. Our Departmental Board and other internal governance structures were set up at an early stage, and have been meeting since September 2016. Membership of the Departmental Board comprises Ministers, the Permanent Secretary, Directors‑General, the Director of Finance and Corporate Services and Non‑Executive Board members of the Department, as well as the Chief Executive of UK Export Finance, and the Chair of their Board. Our Non‑Executive Board members were appointed following a thorough recruitment process which included consideration of approximately 180 candidates. Extensive work has been carried out since the Department was created to ensure that the governance arrangements reflect best practice across government and also the need to join up common themes across what were previously separate organisations or functions. At the same time, we have focused on ensuring that decisions are taken at the right level, and aligned to newly formed Departmental objectives. 28 Department for International Trade Annual Report and Accounts 2016-17
2. DIT Governance Structures 2.1 Overview The Department’s Board and Committee structures are shown in the diagram below.
Departmental Board Chaired by the Nominations and Governance Committee Secretary of State Chaired by Simon Walker, Lead Non‑Executive Board Member Meets once per year Members: Ministers, Permanent Secretary, Non‑Executives, Directors General (DGs) Audit and Risk Assurance Committee and Finance Director Chaired by Julie Currie, Non-Executive Board Member Meets ten times per Meets four times a year year
Executive Committee Finance, Performance and Risk Committee Chaired by the Chaired by Alison Currie, Director of Finance and Corporate Services Permanent Secretary Meets monthly
Members: DGs, CEO UKEF, Directors of HR, Finance, Ministerial People Committee Strategy and Transition Chaired by James Norton, HR and Organisational Development Director Meets fortnightly Meets monthly
The above Board and Committees 2.2 Departmental Board and supported in its work by both the Audit have clear remits that ensure clarity its Committees and Risk Assurance Committee and and accountability, allowing Board the Nominations and Governance The Departmental Board brings and Committee members to make Committee. together the expertise of officials, decisions, monitor performance and Ministers and Non‑Executive Board The Audit and Risk Assurance manage resources and risk. We have the Members to provide support and Committee met three times appropriate membership of our Board challenge on overall delivery of the between July 2016 and March 2017, and Committees, including Ministers, Department’s operational and policy providing assurance on the quality Non‑Executives, and officials. We have objectives. The Board met six times of the Department’s accounts, audit closely followed the guidance set out between July 2016 and March 2017; two arrangements, governance framework in the Corporate Governance Code for of these were in shadow form, before and risk management arrangements. Central Government Departments, in the Non‑Executive Board Members had The Committee also reviews the work setting up our governance structures. been appointed. The Board provided of Internal Audit and the National Audit Biographies of Departmental Board collective strategic leadership of the Office (NAO). members are available at: https://www. Department and has been focused on gov.uk/government/organisations/ The Nominations and Governance building the capacity and capability of department‑for‑international‑trade Committee is responsible for the department as well as assessing ensuring that senior appointments finance, risk and other cross‑cutting and remuneration arrangements issues. The Board provided strategic are transparent, fair and support input and advice on a range of DIT departmental objectives, and ensures priorities, including on: trade and effective corporate governance investment promotion, trade policy, arrangements. This is chaired by the export finance, departmental security, lead Non‑Executive Board member, capability, and the Civil Service People Simon Walker. Survey. The Departmental Board is Department for International Trade Annual Report and Accounts 2016-17 29
2.3 Executive Committee and workforce, led by great leaders, made. Both of these are published on Sub‑Committees underpinned by a high performing the Department’s intranet, shared via and inclusive culture, that delivers the staff bulletin to all staff and played at The Departmental Board has delegated the departmental strategy and group meetings. For the year ahead, we certain responsibilities to the Executive ministerial priorities. Main items have established similar arrangements Committee whose remit is ensuring that have been considered this year for the Executive Committee, to ensure effective management of DIT, and include the results of the People that blogs are written by members shaping the strategic direction of the Survey, Learning and Development following meetings and summary Department. The Executive Committee and Performance Management. minutes are circulated to all staff. has met fortnightly during the year, and has overseen operational strategy 2.4 Information Management 2.6 Non‑Executive Board Member and corporate planning, people and Appointments and Diversity To enable the Departmental Board and communications strategies, and Executive Committee to make informed Appointments were run through a performance, finance and risk. In this decisions we have worked to improve process of fair and open competition in financial year, the Committee has data and the capture of management line with the Office of the Commissioner focused on establishing new capabilities information. Data sheets, financial for Public Appointments guidelines. and bringing together existing functions dashboards and risk registers are now All Non‑Executive positions were under one new Ministerial Government provided to the Departmental Board, advertised openly and centrally Department. Areas considered by Executive Committee, and Performance, through the Cabinet Office Public the Executive Committee include the Finance and Risk Committee on a monthly Appointments website. To ensure that Department’s structure, strategy and basis. These are approved by the Director the independence of Non‑Executives vision, as well as developments in of Finance and Corporate Services. is maintained they are appointed for estates, technology, security and digital, a three year fixed period, which can staff resourcing and engagement, The data sheets are collated using be extended by a maximum of three and stakeholder engagement. The data publicly available on data.gov.uk, further years. In addition there are Executive Committee has established alongside our own internal metrics. This processes in place for registering two Sub‑Committees to support its includes data on: the UK’s economic and mitigating any conflicts of work by fulfilling defined roles including performance, DIT’s output performance interests. DIT has championed gender ensuring that staff from numerous linked to Departmental objectives and diversity; it is the first major Whitehall different locations and budgets from corporate functions, as well as including department to have a female majority of different organisations were transitioned performance against key UKEF metrics. Non‑Executive Board Members. seamlessly. As the data sheets are structured around departmental objectives, they allow Non -Executive Board members, • The Performance, Finance and Board members to chart and scrutinise along with all other board members, Risk Committee has met monthly progress against key performance are required to declare any personal since November 2016. It has indicators. They will continue to evolve or business interest which may, or responsibility for overseeing aspects alongside the development of our Single may be reasonably perceived (by a of transition to the new Department, Departmental Plan. In addition, the member of the public), to influence their including the agreement of new Chief Economist produces monthly data judgement in performing their functions budgets for the Department, sheets, with standardised statistics, to be and obligations. These are recorded in financial governance and corporate made available for all staff to access and a register of interests. Where a Board policies. In addition, the Committee use across the network. member declares a potential conflict at considers departmental corporate meetings, it is recorded in the minutes priorities, including: departmental 2.5 Board and Committee and the Board member takes no part in business plans, corporate Transparency the meeting for the duration of that item planning, developing and improving of discussion. frameworks for the monitoring and A central pillar of the Department’s governance arrangements has been evaluation of performance, finance In addition to Board meetings, Non- ensuring that transparency is provided and risk, detailed monitoring of Executive Board members contribute around the top‑level governance forums. DIT’s performance, overseeing DIT’s to the Department across all priorities. For the Departmental Board, a readout finances, investment appraisal and In 2016‑17 this input focused on is provided by the Secretariat and a project monitoring. organisational formation, transition and video message from one of the Board integration. • The People Committee supports members, usually from the Secretary the Executive Committee in building of State, to allow staff to hear about the an engaged, expert and diverse topics discussed and the decisions 30 Department for International Trade Annual Report and Accounts 2016-17
2.7 Board and Committee attendance The table below provides attendance details for the Departmental Board and its main Committees up until March 2017 except for the Nominations & Governance Committee which did not meet during this reporting period.
Meeting attendance per member of meetings eligible to attend Audit & Risk Departmental Executive Assurance Name of board or committee member Notes Board Committee Committee Dr Liam Fox MP 6/6 Greg Hands MP 5/6 The Lord Price 5/6 Mark Garnier MP 6/6 Simon Walker 1 3/4 Dr Pippa Malmgren 1 3/4 Julie Currie 1 4/4 2/2 Noel Harwerth 1 3/4 Robert Hull 1 2/2 Richard Vincent 1 2/2 Chris Jenkins 1 2/2 Sir Martin Donnelly 2 6/6 11/11 Antonia Romeo 2 0/0 1/1 John Alty 6/6 11/12 Catherine Raines 6/6 8/12 Louis Taylor 6/6 10/12 Alison Currie 3 4/5 11/12 James Norton 11/12 Paul McComb 8/12 Emma Squire 4 7/7 Darren Tierney 4 5/5 Ministers Non-Executive Board members Officials Notes to the Attendance Table: 1. The DIT non‑executive board members: Simon Walker, Dr Pippa Malmgren and Julie Currie were not in post until the third Departmental Board in November 2016. Noel Harwerth was appointed to the Board in January 2017. Robert Hull, Richard Vincent and Chris Jenkins were independent members of the Audit and Risk Assurance Committee. They were not members of the Departmental Board. 2. Sir Martin Donnelly left his post as Permanent Secretary on 26 March 2017. He was succeeded by Antonia Romeo on 27 March 2017. She was not in post for the Departmental Boards during the reporting period. 3. Alison Currie joined the Departmental Board in October 2016. 4. Emma Squire went on maternity leave on 18 January 2017 and Darren Tierney took over her role on 30 January 2017. Department for International Trade Annual Report and Accounts 2016-17 31
2.8 Legacy governance The findings of the Board Effectiveness 3. Risk Management arrangements Evaluation and draft recommendations 3.1 Risk Management Process were discussed at the Nominations Prior to the creation of DIT in July 2016, and Governance Committee on 5 June DIT’s risk management process has built the constituent parts of DIT operated 2017, which included attendance of upon former UKTI’s Risk Management under their own legacy governance the Permanent Secretary. The draft Framework that set out the process arrangements. The UKTI Executive recommendations included ensuring by which risks are identified, managed Board met monthly from March 2016 to that the Board had sufficient informal and mitigated, and how its risk appetite July 2016 and the UKTI Audit and Risk time together as well as formal, and was assessed. The framework has Assurance Committee met twice. Trade that agendas focused on strategy, been reviewed and is currently being Policy Group and the GREAT campaign performance, finance, data and risk. strengthened in line with the core operated within the governance Simon Walker presented the findings elements in the framework for ‘Managing frameworks disclosed in the Annual and final recommendations to the Risk in Government’. Reports of the Department for Business, Departmental Board on 13 June 2017. Energy and Industrial Strategy and the The Board agreed them and will take The DIT Risk Framework is owned by Cabinet Office respectively. steps to implement them. The outcome the Accounting Officer, with Board and Executive Committee level owners 2.9 Board performance and will be reported next year. assigned for the Department’s most effectiveness 2.10 Compliance with the Corporate significant risks to delivery of its In April and May 2017, Simon Walker, Governance Code objectives. Risks are identified and the Department’s Lead Non-Executive managed at the operational level in the We carried out an assessment of Board Member, carried out the first first instance, including assessment of the Department’s compliance with annual evaluation of the Departmental the four risk categories: Internal; External; the Corporate Governance Code for Board’s effectiveness, in line with the Strategic and Major Project. A traffic light Central Government Departments. Corporate Governance Code. During system is used to assess the status of The Nominations and Governance this evaluation, Simon, with support each risk based upon its probability and Committee reviewed the results of the from the Board Secretariat, conducted impact and accountabilities for mitigating assessment in May 2017 and concluded interviews with members of the Board, actions and risk ownership are allocated. that DIT is compliant with the spirit and as well as receiving further input principles of the Code, acknowledging The diagram below sets out the process from Board members and attendees that the governance of the Department by which DIT assesses and manages via questionnaires. A component of has been evolving since its formation in risk. Directorates and Groups regularly the Board Effectiveness Evaluation July 2016. review their own risk registers and sought views on the data received by performance dashboards. the Board. This was deemed to be The Committee noted that a Board sufficient for the effective operation of Operating Framework for DIT existed in the Board. The Board commented that draft but has not yet been considered by they had seen positive improvements the Board. The Committee also noted over the financial year in question, that there was only one Non‑Executive and endorsed continuing to enhance Board Member on the Audit and reporting through the work being led by Risk Assurance Committee, rather the Chief Economist, including through than at least two as specified in the the development of a monitoring and Code; reflecting our small number of evaluation framework. This will ensure Non‑Executive Board Members. We the Board continues to have the have ensured sufficient independent opportunity to enhance the quality of scrutiny through appointing three data it receives over the coming year. additional independent members to the Audit Committee. The Chair also has a standing update to raise issues to the Board. 32 Department for International Trade Annual Report and Accounts 2016-17
DIT Risk Management Structure
Board and Accounting Officer
Audit and Risk Assurance Committee
DIT Executive The DIT ExCo reviews and Committee (ExCo) discusses management of top level risk and performance issues; and helps identify wider strategic risks.
DIT Performance DIT Risk Register Report
Performance, Finance and Risk The PFRC meets monthly in Committee (PFRC) advance of the ExCo, to monitor mitigating actions and confirm risks that should be escalated to ExCo.
DIT Performance DIT Risk Registers Reports
The Groups and Directorates Groups and Directorates identify, assess, address and record risks and risk appetite on an on‑going basis via group Risk Registers. Department for International Trade Annual Report and Accounts 2016-17 33
Risk assessment and management are 3.2 DIT’s Main Risks and Operational Delivery reviewed and discussed each month Actions Taken There was a risk that DIT would not be at the Performance, Finance and Risk During 2016-17 the main risks to DIT able to meet the targets on the value of Committee (PFRC), chaired by the included: exports and the number of exporters Director of Finance and Corporate which the Department had been set. DIT Services. The Committee assess Establishing a new governance set up a digital platform to make export local risk registers and performance framework opportunities and support available to dashboards, oversees a DIT risk the widest number of UK companies and register, develops mitigation actions There was a risk that effective set up a system for focusing on high value and recommends which risks and governance arrangements were not exports where Government can make the performance issues should be in place as the new Department was biggest difference. discussed at the next monthly Executive formed. The Board and Committees were all in place by September 2016, and Committee. Machinery of Government risk all met regularly. Governance processes Both the PFRC and Executive Committee for UKTI were adopted by DIT and There was a risk that adequate funds help to verify that DIT is managing the then reviewed to ensure that they were were not transferred to support the new critical strategic risks that could have appropriate for the new Government Department following the Machinery of the greatest impact on performance. Department. Government changes. We worked with The Audit and Risk Assurance Treasury to ensure the correct transfer of Trade Policy Committee reviews the Risk Register resource from BEIS and FCO. and provides independent challenge There was a risk that the new Department People resources and capability to DIT’s management in order to give did not have the capacity or structures assurance to the Accounting Officer and in place to manage the heavy trade There was a risk that a lack of skills, the Board as to whether risks are being policy workload. DIT established capability and people could impact appropriately identified and mitigated. cross -government forums, engaged DIT’s ability to deliver. We have been The Risk Register and the process sitting international partners, developed designing our operating model and behind its development have been detailed policy positions on a new agreeing resource requirements with discussed in‑depth at the Audit and independent trade policy framework for Treasury. We also developed a Learning Risk Assurance Committee, as well as the UK and invested in developing the and Development strategy and talent reviewed by the Departmental Board on skills and capability of Trade Policy Group mapping exercise. We are developing a a regular basis. The Chair of the Audit staff. learning hub to foster a learning culture and Risk Assurance Committee provides across DIT. regular read-outs of the Committee meetings to the Departmental Board, including raising specific risks and the supporting decision making structure. 34 Department for International Trade Annual Report and Accounts 2016-17
4. Other key governance 4.2 Machinery of Government 5. Accounting Officer’s Review developments Transition of Effectiveness 4.1 Governance arrangements Following the creation of DIT, a Transition As Accounting Officer, I am required with UKEF Director was appointed to manage to conduct an annual review of the the substantial task of setting up the effectiveness of the Department’s Following the creation of DIT in July new Department. In line with Cabinet governance structures, risk management 2016, UKEF’s work has been aligned Office advice and guidance he set up a and internal control. I have established with that of trade policy, and trade and Transition Programme which brought a process for this annual review and investment under one Secretary of together all the major tasks required conducted one for the reporting period State. UKEF’s status as a legally distinct to bring the constituent parts of DIT when the Department has been in organisation and Ministerial Department together into one legal entity. The major existence. This review is informed by of State was not changed under these milestones identified in the project officials, the Department’s internal Machinery of Government changes and plan were all achieved to deadline by audit team, external auditors, and other remains in effect. There are a number of Januar y 2017. governance reports from which I have mechanisms in place to ensure that DIT received robust assurance. and UKEF are aligned in their policies A three phased approach was used and strategy. The UKEF CEO and Chair to ensure that financial controls and 5.1 Groups’ and Directorates’ are members of the DIT Departmental processes were maintained throughout statements on governance, Board, and the CEO is also a member the transition period and beyond. The risk management and of the Executive Committee, and is first phase saw the constituent parts internal control line managed by the DIT Permanent of DIT continue to operate under their An Annual Governance Return is Secretary. legacy governance arrangements. completed by Directors and Directors Following the agreement of a new budget The Ministerial Strategy Directorate in General to review and gain assurance for the Department in January 2017, the DIT undertakes a policy sponsorship role over those parts of the governance policies and processes of former UKTI – of UKEF. The Directorate works closely structures, risk management and internal the largest component of DIT’s budget – with UKEF to ensure strategic alignment control framework for which they have were migrated to the new Department. A of UKEF and wider DIT objectives. This responsibility. Individual discussions rolling review of these policies was then team work closely with UK Government with Directors and Directors General, undertaken to ensure that the policies Investments, the government’s centre facilitated by Internal Audit, take place meet the needs of the new Department, of expertise in corporate governance to review and challenge the returns. and continued to represent best practice. and corporate finance, to ensure that Internal Audit prepares a summary the wider DIT context is taken into 4.3 Data Handling and paper and this is used to support the account when considering issues of Information Security drafting of the Governance Statement. UKEF’s corporate governance, including The Foreign and Commonwealth Office No personal data related incidents attending the quarterly shareholder (FCO) Internal Audit team has reviewed have been reported to the Information meetings. the governance and controls within the Commissioner’s Office. FCO which affect DIT, primarily in relation to the staff based overseas under FCO employment contracts. Furthermore, the Executive Committee is presented with monthly financial management reports, together with the corporate dashboard report which provides an overview of performance, finance and the top risks within DIT. These are scrutinised and challenged by the Performance, Finance and Risk Committee to ensure that the information being received is adequate, timely and of good quality. Department for International Trade Annual Report and Accounts 2016-17 35
5.2 Internal Audit Review of 5.4 UKTI Public Accounts DIT Commercial Function Governance, Risk Management Committee (PAC) Hearing and DIT’s Commercial Director has led a and Assurance Framework DIT Commercial Function commercial transformation programme The Government Internal Audit Agency PAC Hearing throughout 2016‑17 to develop a conducted a review and its report has Commercial Function better to support Following a settlement agreed with highlighted that DIT has a number of the Department’s objectives for trade and PA Consulting in May 2016, arising policies and procedures which are in investment. Over the past 12 months, from a dispute over the charges levied transition and has advised that while significant work has been undertaken on a contract between UKTI and PA there is a governance, risk management to develop the commercial capabilities Consulting for the deployment of sector and assurance framework in place which of DIT; the initial focus being immediate specialists, and the NAO investigation reflects good practice, there is a need to improvements in procurement and and report published in June 2016, the formalise and articulate the framework. contract activity, underpinned by the Public Accounts Committee (PAC) called The recommendations made are recruitment of a senior team with the an evidence session into the dispute on being addressed to ensure that robust necessary commercial skills. The 28 November 2016. The PAC report was Governance and Risk Management Commercial Function now includes published on 5 April 2017 and included arrangements are in place. a number of procurement, contract a number of recommendations for management and relationship specialists 5.3 Shared Services the Cabinet Office and DIT, including with a focus on identifying efficiencies improving commercial capability During 2016‑17, UK Shared Business and value for money, as well as within DIT, ensuring proactive contract Services (UK SBS) was the shared managing strategically important and/ management and implementing robust service provider for payroll, HR records, or complex requirements. The function record keeping. In addition, the PAC transactional finance and procurement. has been restructured in to five service recommended that the NAO conduct an In April 2017 DIT brought procurement areas (Professional Services, Events independent forensic audit of both UKTI back in house to the newly formed and Marketing, IT/ Digital, Business (as was) and PA Consulting to establish ‘Procurement Hub’. There is an on‑going Process Outsourcing and Commercial the facts. project to review the shared service Projects and Income Generation), led by requirements of the new Department. commercial specialists. A quarterly assurance letter for each quarter in 2016-17 was provided by the Chief Executive of UK SBS to the Accounting Officer and to the Director of Finance and Corporate Services. This included giving assurance that the level of services provided will be unaffected during the period of change. The Head of Internal Audit for UK SBS provided two opinions, one on UK SBS customer facing operations and the other for internal operations. Both received a Moderate1 assurance opinion.
1 A moderate assurance opinion that reflects that some improvements are required to enhance the adequacy and effectiveness of the framework of governance, risk management and control. 36 Department for International Trade Annual Report and Accounts 2016-17
With this new structure now in place, the After the end of the financial year, 5.7 Ministerial Directions Commercial Function has increased its the team from the GIAA presents a During the period, no ministerial focus on performance management, summary of key areas and an overall directions were given to DIT or its commercial capability and the continued assurance opinion given for the year constituent parts prior to the creation of development of robust governance on the adequacy and effectiveness of the Department in July 2016. and pro‑active risk management. The DIT’s framework of governance, risk Function will continue to strengthen management and control necessary 6. Summary/Conclusion capability (both within the Commercial to support the achievement of the Team and across DIT), working with the organisation’s objectives and the I have considered the evidence provided Cabinet Office to develop a ‘Commercial personal responsibilities for stewardship which formed the basis of this Annual Blueprint’ that will provide the roadmap to of government funds that rest with the Governance Statement along with the becoming a top performing Commercial Accounting Officer. independent advice received from the Function, supported by all senior staff Audit and Risk Assurance Committee The GIAA opinion informs the context going through the Cabinet Office and the GIAA, and can conclude of this Governance Statement. This was Commercial Assessment Centre in the that DIT has adequate governance presented to the ARAC for consideration first quarter of 2017‑18. The Finance and and risk management systems, and on 16 May 2017. The overall opinion on Commercial Functions have also worked we are committed to ensuring these the internal control environment of GIAA together to implement a governance remain compliant with best practice. was moderate1. structure for projects and spend within I have also taken into account the Corporate Governance Code for Central DIT, detailing contract delegation limits 5.6 Machinery of Government Government Departments, and I am and required stages for engagement Changes with relevant business areas, corporate satisfied DIT is able to demonstrate functions and senior level approvals. Assurance was provided by the Cabinet compliance with the principles of These work streams aim to deliver the Office to DIT that all spend on GREAT the code. recommendations made by the PAC. prior to the transfer of function was proper and complied with all relevant 5.5 Internal Audit Assurance spending and procurement controls. The assurance for Trade Policy Group The Audit and Risk Assurance prior to the transfer to DIT was provided Committee (ARAC) agreed a programme through the BEIS Internal Audit for the Government Internal Audit Agency Function. In 2016-17 BEIS received (GIAA) to carry out various audits during a ‘limited’2 opinion over the controls the year and to report to the Accounting operating through 2016-17. DIT has Officer. The GIAA delivered 18 internal reviewed the detailed findings and does audit reports, of which 12 were at not believe they materially impact DIT’s overseas posts and 6 were UK‑based. overall control environment in 2016-17. There were two additional UK‑based advisory assignments undertaken in the year. These reports covered a range of risk areas, including risk management and governance.
1 A moderate assurance opinion reflects that some improvements are required to enhance the adequacy and effectiveness of the framework of governance, risk management and control. 2 A “limited” opinion reflects that there are significant weaknesses in the framework of governance, risk management and control such that it could be or could become inadequate and ineffective. Department for International Trade Annual Report and Accounts 2016-17 37
Other Public Interest Statements Basis of accounts and resources deployed The accounts on pages 52 to 56 and 59 to 78 show DIT’s voted resource only. They have been prepared in accordance with directions given by HMT in pursuance of Section 5(2) of the Government Resources and Accounts Act 2000. Going Concern In common with other government departments, the future financing of DIT’s liabilities is to be met by future grants of supply and the application of future income, both of which are approved by Parliament on an annual basis. There is no reason to believe that future approvals will not be forthcoming and therefore it is considered appropriate to adopt a going concern basis for the preparation of these financial statements. Charging Policy DIT provides services for which it charges fees such as Overseas Market Introduction Service (OMIS) and costs related to events. Any such fees are set to comply with the cost allocation and charging requirements set out in HM Treasury guidance. Whistleblowing Policy The Civil Service Code sets out the values which all Civil Servants are expected to uphold. Further information on the code can be found on this link: www.gov.uk/government/publications/civil-service-code/the-civil-service-code. For raising any concerns regarding possible wrongdoing, our Whistleblowing policy provides guidance on raising legitimate and serious concerns without fear of reprisal or victimisation. For advice or to raise a concern, one of our Whistleblowing nominated officers can be contacted. The current Whistleblowing policy can be accessed by our staff on the DIT intranet. Health and Safety The Permanent Secretary and Executive Board of DIT are committed to providing a safe and healthy working environment for DIT staff and visitors wherever they are based. In the current year we have been operating under the legacy arrangements of our constituent parts. As a new Department we will, over the coming year, be reviewing and updating our existing arrangements to ensure we are managing our health and safety risks effectively. We will work and cooperate with other departments and stakeholders to achieve our aims and identify areas where we can improve. We also want to engage our people in identifying issues and developing solutions and will be setting up systems to achieve this. Fraud Policy DIT has its own fraud policy, which is regularly reviewed and updated. DIT also relies on controls operated by our share service providers to detect and identify fraud. Fraud is a key factor when determining DIT’s internal audit programme, for both UK and overseas audits. Complaints to the Department and Parliamentary Ombudsman During the year, DIT received no complaints that went to the Parliamentary Ombudsman. DIT is committed to providing a high quality, accessible and responsive service to businesses and the community, and takes all of its few complaints very 38 Department for International Trade Annual Report and Accounts 2016-17
seriously. DIT provides all staff advice on how to deal with complaints, in line with Cabinet Office guidance and the Freedom of Information Act. Complaints are handled by the DIT Enquiry Unit. For further details, please contact the: DIT Enquiry Unit on +44 (0)20 7215 5000 or email [email protected] Sustainability DIT is a new Department and in 2016-17 utilised the estates of other government departments. Detailed sustainability data is not available for 2016-17 but will be reported from 2017-18 onwards. DIT is committed to ensuring its day‑to‑day operations are environmentally friendly and as the Department develops we will ensure this is something embedded into our ways of working, for example being digital by default and lowering the amount of paper we use. All DIT procurement follows government best practice, ensuring that sustainability is embedded in its tendering and contract management processes. As we develop our Facilities Management and take over control of our estate in 3 Whitehall Place and 55 Whitehall we will continue to look at how we can further ‘green’ our operations including reducing our waste to landfill and water consumption. Through better use of technology in the workplace we will also look to reduce our travel and therefore the amount of greenhouse gas emissions and domestic and international flights. Auditors These financial statements have been audited, under the Government Resources and Accounts Act 2000, by the Comptroller & Auditor General (C&AG), who is appointed under statute and reports to Parliament. The audit opinion is on pages 57 to 58. The notional cost to DIT of the external audit of its resource account by the NAO for the C&AG was £95k (£85k). Data Handling and Information Security As disclosed on page 34 of the Governance Statement no personal data related incidents have been reported to the Information Commissioner’s Office.
Department for International Trade Annual Report and Accounts 2016-17 39
Remuneration and Staff Report Introduction DIT became a separate legal entity and an employer in its own right on 9 November 2016. Staff costs are reported for the full year and prior year comparatives have been restated; this in accordance with the FReM. For this report Senior Officials are defined as members of the DIT Departmental Board. Prior to the creation of the Department in July 2016 the Department operated under the legacy arrangements described in the Governance Statement. Remuneration Policy The remuneration of Senior Civil Servants is set by the Prime Minister, following independent advice from the Senior Salaries Review Body (SSRB). The Review Body also periodically advises the Prime Minister on the pay and pensions of Members of Parliament and their allowances; on Peers’ allowances and on the pay, pensions and allowances of Ministers and others whose pay is determined by the Ministerial and Other Salaries Act 1975. In reaching its recommendations, the Review Body was required to have regard to the following considerations; • the need to recruit, retain and motivate suitably able and qualified people to exercise their different responsibilities; • regional/local variations in labour markets and their effects on the recruitment and retention of staff; • government policies for improving public services, including the requirement on departments to meet the output targets for the delivery of departmental services; • the funds available to departments as set out in the Government’s departmental expenditure limits; and • the Government’s inflation target. The Review Body takes account of the evidence it receives about wider economic considerations and the affordability of its recommendations. Further information about the work of the Review Body can be found at www.gov.uk/ Senior Official Appointments The Constitutional Reform and Governance Act 2010 requires Civil Service appointments to be made on merit, on the basis of fair and open competition. The Recruitment Principles published by the Civil Service Commission specify the circumstances when appointments may be made otherwise. The officials covered by this report hold appointments which are open‑ended. Early termination, other than for misconduct, would result in the individual receiving compensation, as set out in the Civil Service Compensation Scheme. Further information about the work of the Civil Service Commission can be found at: (www.civilservicecommission.org.uk). 40 Department for International Trade Annual Report and Accounts 2016-17
Remuneration Report – Ministers The following sections provide details of the remuneration and pension interests of the Ministers of the Department. (Full time equivalent figures for Ministers who worked part of the year can be found in brackets.) Remuneration (salary, benefits in kind and pension benefits)
Ministers’ salaries and pension benefits in 2016‑17 were as follows: 2016‑17 2015‑16 Pensions benefits Total Total Salary (to nearest (to nearest (to nearest Ministers (£) £1000)1 £1000) £1000) The Rt Hon Dr Liam Fox MP 48,270 13,000 61,000 – (from 13 July 2016) (67,505) Secretary of State for International Trade and President of the Board of Trade The Rt Hon Greg Hands MP 21,120 6,000 27,000 – (from 15 July 2016) (31,680) Minister of State for Trade and Investment Lord Price CVO2 81,795 – 82,000 – (from 16 July 2016) (115,257) Minister of State for Trade Policy Mark Garnier MP 15,879 4,000 20,000 – (from 17 July 2016) (22,375) Parliamentary Under Secretary of state Baroness Anelay of St Johns DBE3 – – – – (from 12 March 2016 to 3 April 2016) Interim Minister of State for Trade and Investment Lord Maude of Horsham4 – – – – (from 11 May 2015 to 11 March 2016) Minister of State for Trade and Investment Lord Livingston of Parkhead5 – – – – (to 10 May 2015) Minister of State for Trade and Investment 1 The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) less (the contributions made by the individual). The real increase excludes increases due to inflation or any increase or decrease due to a transfer of pension rights. 2 The Minister elected not to receive any pension benefits. 3 The Minister was paid by the FCO and DIT was recharged for this period. Please refer to FCO accounts for full details. 4 The Minister was paid by the FCO. Please refer to FCO accounts for full details. 5 The Minister elected not to draw a Ministerial salary or receive any pension benefits. This table has been subject to audit. Department for International Trade Annual Report and Accounts 2016-17 41
Ministers’ pension and benefits entitlements in 2016‑17 were as follows: Accrued pension at Real increase pension in pension age as at and related 31/03/17 lump sum at and related pension CETV at CETV at Real increase lump sum age 65 31/03/17 31/03/16 in CETV Ministers £000 £000 £000 £000 £000 The Rt Hon Dr Liam Fox MP 0‑5 0‑2.5 79 65 7 (from 13 July 2016) Secretary of State for International Trade and President of the Board of Trade The Rt Hon Greg Hands MP 0‑5 0‑2.5 49 42 3 (from 15 July 2016) Minister of State for Trade and Investment Lord Price CVO1 – – – – – (from 16 July 2016) Minister of State for Trade Policy Mark Garnier MP 0‑5 0‑2.5 4 0 2 (from 17 July 2016) Parliamentary Under Secretary of state Baroness Anelay of St Johns DBE2 – – – – – (from 12 March 2016 to 3 April 2016) Interim Minister of State for Trade and Investment Lord Maude of Horsham2 – – – – – (from 11 May 2015 to 11 March 2016) Minister of State for Trade and Investment Lord Livingston of Parkhead3 – – – – – (to 10 May 2015) Minister of State for Trade and Investment 1 The Minister does not contribute to the Parliamentary Contributory Pension Fund 2 The Minister is or was paid by the FCO. Please refer to FCO accounts for full details. 3 The Minister elected not to draw a Ministerial salary or receive any pension benefits. This table has been subject to audit.
Ministerial pensions Pension benefits for Ministers are Those Ministers who are Members of Benefits for Ministers are payable from provided by the Parliamentary Parliament may also accrue an MP’s State Pension age under the 2015 Contributory Pension Fund (PCPF). pension under the PCPF (details of which scheme. Pensions are re‑valued annually The scheme is made under statute and are not included in this report). A new in line with Pensions Increase legislation the rules are set out in the Ministers’ MP’s pension scheme was introduced both before and after retirement. The etc. Pension Scheme 2015, available from May 2015, although members who contribution rate from May 2015 is at http://qna.files.parliament.uk/ were MPs and aged 55 or older on 1 11.1% and the accrual rate is 1.775% of ws‑attachments/170890/original/ April 2013 have transitional protection to pensionable earnings. PCPF%20MINISTERIAL%20 remain in the previous MP’s final salary The figure shown for pension value SCHEME%20FINAL%20RULES.doc. pension scheme. includes the total pension payable to the member under both the pre‑ and post‑2015 Ministerial pension schemes. 42 Department for International Trade Annual Report and Accounts 2016-17
The Cash Equivalent Transfer Value The real increase in the value (CETV) of the CETV This is the actuarially assessed This is the element of the increase capitalised value of the pension scheme in accrued pension funded by the benefits accrued by a member at a Exchequer. It excludes increases due to particular point in time. The benefits inflation and contributions paid by the valued are the member’s accrued Minister. It is worked out using common benefits and any contingent spouse’s market valuation factors for the start and pension payable from the scheme. A end of the period. CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the pension benefits they have accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total Ministerial service, not just their current appointment as a Minister. CETVs are calculated in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken. Department for International Trade Annual Report and Accounts 2016-17 43
Remuneration Report – Senior Officials Senior Officials’ salaries and pension benefits in 2016‑17 were as follows, (full time equivalent figures for senior officials who worked part of the year can be found in brackets):
2016‑17 Bonus Pension Total Salary Payments Benefits1 remuneration Senior Officials £000 £000 £000 £000 Antonia Romeo2 0‑5 – 1 0‑5 (from 27 March 2017) (160-165) Permanent Secretary and Accounting Officer Sir Martin Donnelly3 120‑125 – 24 140‑145 (from 13 July 2016 to 26 March 2017) (165‑170) Permanent Secretary and Accounting Officer Catherine Raines4 150-155 20‑25 59 230‑235 (Chief Executive of UKTI prior to 13 July 2016) Director General of International Trade and Investment John Alty 85-90 – 8 95-100 (from 14 July 2016) (120-125) Director General of International Trade Policy Alison Currie 85‑90 – 34 120‑125 (from 1 August 2016) (130-135) Director of Corporate Services and Finance Louis Taylor5 – – – – UKEF Chief Executive 1 The value of pension benefits accrued during the year is calculated as (the ealr increase in pension multiplied by 20) plus (the real increase in any lump sum) less (the contributions made by the individual). The real increases exclude increases due to inflation or any increase or decreases due to a transfer of pension rights. 2 Antonia Romeo also held the position of Her Majesty’s Consul General in New York from 27 March 2017 to 30 June 2017. Antonia was asked to take up the role of DIT Permanent Secretary early to minimise the gap in accountability after her predecessor left and in the Consul General responsibilities. 3 Sir Martin Donnelly was Joint Permanent Secretary of BEIS and DIT from 13 July 2016 to 06 September 2016 and his salary for this period was paid and is also disclosed by BEIS. Sir Martin received a payment in lieu of notice of £41,647 in April 2017. 4 Catherine Raines was a senior official in UKTI and the role has transferred to DIT, as such, prior year comparatives are disclosed below.
Catherine Raines 85‑90 – 16 100‑105 (from 7 September 2015) (150‑155)
5 Louis Taylor is paid by UKEF. Please refer to UKEF accounts for full details. This table has been subject to audit.
The Senior Officials in this report are defined as members of the DIT Departmental Board. Prior to the creation of the Department in July 2016 the Department operated under the legacy arrangements described in the governance statement. 44 Department for International Trade Annual Report and Accounts 2016-17
Salary Pay multiples Pay range of SCS Total ‘Salary’ includes gross salary; overtime; Reporting bodies are required to £60,000 – £64,999 4 reserved rights to London weighting or disclose the relationship between the London allowances; recruitment and remuneration of the highest‑paid director £65,000 – £69,999 14 retention allowances; private office in their organisation and the median £70,000 – £74,999 10 allowances and any other allowance remuneration of the organisation’s to the extent that it is subject to UK workforce. This disclosure on pay £75,000 – £79,999 5 taxation. This report is based on accrued multiples has been subject to audit. £80,000 – £84,999 4 payments made by the Department The banded annualised remuneration of and thus recorded in these accounts. £85,000 – £89,999 7 the highest‑paid director in Department In respect of Ministers in the House for International Trade in the financial £90,000 – £94,999 2 of Commons, departments bear only year 2016‑17 was £170,000-£175,000 the cost of the additional Ministerial £95,000 – £99,999 – (2015‑16: £150,000‑£155,000). This was remuneration; the salary for their £100,000 – £104,999 3 5 times (2015‑16: 4 times) the median services as an MP (£74,962 from 1 remuneration of DIT civil servants. The £105,000 – £109,999 1 April 2016, £74,000 from 8 May 2015 median remuneration was £35,409 and £67,060 from 1 April 2014) and £110,000 – £114,999 2 (2015‑16: £38,106). In 2016‑17, no various allowances to which they are employee received remuneration in £115,000 – £119,999 3 entitled are borne centrally. However, excess of the highest‑paid director the arrangement for Ministers in the £120,000 – £124,999 2 (2015‑16: Nil). House of Lords is different in that £125,000 – £129,999 – they do not receive a salary but rather Total remuneration includes salary, an additional remuneration, which non‑consolidated performance‑related £130,000 – £134,999 2 cannot be quantified separately from pay and benefits‑in‑kind. It does not £135,000 – £139,999 – their Ministerial salaries. This total include severance payments, employer remuneration, as well as the allowances pension contributions and the cash £140,000 – £144,999 – to which they are entitled, is paid by the equivalent transfer value of pensions. £145,000 – £149,999 – Department and is therefore shown in full The pay multiple disclosures have been in the figures above. subject to audit. £150,000 – £154,999 1 Benefits in Kind The table opposite shows the number £155,000 – £159,999 – of DIT SCS staff by pay range as at 31 The monetary value of benefits in kind £160,000 – £164,999 1 March 2017. Bonuses are not included covers any benefits provided by the and salary ranges represent full‑time £165,000 – £169,999 1 Department and treated by HM Revenue equivalent rates. These pay ranges cover and Customs as a taxable emolument. Total 62 those staff employed on open‑ended and There are no benefits in kind paid to our This table has been subject to audit. fixed term contracts. Senior Management team. Bonuses Bonuses are based on performance levels attained and are made as part of the appraisal process. Bonuses relate to the performance in the year in which they become payable to the individual. The bonus reported in 2016‑17 relate to performance in 2015‑16. Department for International Trade Annual Report and Accounts 2016-17 45
Pension Benefits Senior Officials’ pension and benefits entitlements in 2016‑17 were as follows:
Accrued pension Real increase at pension age as in pension and at 31/03/17 and related lump sum CETV at CETV at Real increase related lump sum at pension age 31/03/17 31/03/16 in CETV £000 £000 £000 £000 £000 Antonia Romeo 25‑30 plus a lump 0‑2.5 371 371 – (from 27 March 2017) sum of 65‑70 Permanent Secretary and Accounting Officer Sir Martin Donnelly 75‑80 plus a lump 0‑2.5 plus a lump 1,717 1,672 23 (from 13 July 2016 to sum of sum of 2.5-5 26 March 2017) 225‑230 Permanent Secretary and Accounting Officer Catherine Raines1 10‑15 2.5‑5 177 131 32 (Chief Executive of UKTI prior to 13 July 2016) Director General of International Trade and Investment John Alty 60‑65 plus a lump 0‑2.5 plus a lump 1,430 1,421 8 (from 14 July 2016) sum of sum of 0-2.5 Director General of Trade Policy 185‑190 Alison Currie 0‑5 0‑2.5 24 – 18 (from 1 August 2016) Director of Corporate Services and Finance Louis Taylor2 – – – – – UKEF Chief Executive and Accounting Officer 1 Catherine Raines was a senior official in UKTI and the role has transferred to DIT, as such, prior year comparatives are disclosed below.
Catherine Raines (from 7 September 2015) 5‑10 0‑2.5 98 112 36
2 Louis Taylor is paid by UKEF. Please refer to UKEF accounts for full details. This table has been subject to audit. 46 Department for International Trade Annual Report and Accounts 2016-17
Civil Service Pensions defined benefit arrangement or of pensionable salary (in addition to a ‘money purchase’ stakeholder the employer’s basic contribution). Pension benefits are provided pension with an employer contribution Employers also contribute a further through the Civil Service pension (partnership pension account). 0.5% of pensionable salary to cover the arrangements. From 1 April 2015 a cost of centrally‑provided risk benefit new pension scheme for civil servants Employee contributions are cover (death in service and ill health was introduced – the Civil Servants salary‑related and range between 3% retirement). and Others Pension Scheme or alpha, and 8.05% of pensionable earnings for which provides benefits on a career members of classic (and members of The accrued pension quoted is the average basis with a normal pension alpha who were members of classic pension the member is entitled to age equal to the member’s State immediately before joining alpha) and receive when they reach pension age, Pension Age (or 65 if higher). From that between 4.6% and 8.05% for members or immediately on ceasing to be an date all newly appointed civil servants of premium, classic plus, nuvos and active member of the scheme if they and the majority of those already in all other members of alpha. Benefits are already at or over pension age. service joined alpha. Prior to that in classic accrue at the rate of 1/80th Pension age is 60 for members of date, civil servants participated in the of final pensionable earnings for each classic, premium and classic plus, 65 Principal Civil Service Pension Scheme year of service. In addition, a lump sum for members of nuvos, and the higher of (PCSPS). The PCSPS has four sections: equivalent to three years initial pension 65 or State Pension Age for members 3 providing benefits on a final salary is payable on retirement. For premium, of alpha. (The pension figures quoted basis (classic, premium or classic benefits accrue at the rate of 1/60th for officials show pension earned in plus) with a normal pension age of 60; of final pensionable earnings for each PCSPS or alpha – as appropriate. and one providing benefits on a whole year of service. Unlike classic, there is Where the official has benefits in both career basis (nuvos) with a normal no automatic lump sum. classic plus the PCSPS and alpha the figure quoted pension age of 65. is essentially a hybrid with benefits is the combined value of their benefits for service before 1 October 2002 in the two schemes, but note that part These statutory arrangements are calculated broadly as per classic and of that pension may be payable from unfunded with the cost of benefits benefits for service from October 2002 different ages.) met by monies voted by Parliament worked out as in premium. In nuvos a each year. Pensions payable under Further details about the Civil Service member builds up a pension based on classic, premium, classic plus, nuvos pension arrangements can be found at his pensionable earnings during their and alpha are increased annually in the website period of scheme membership. At the line with Pensions Increase legislation. www.civilservicepensionscheme.org.uk end of the scheme year (31 March) the Existing members of the PCSPS who member’s earned pension account is were within 10 years of their normal credited with 2.3% of their pensionable pension age on 1 April 2012 remained earnings in that scheme year and the in the PCSPS after 1 April 2015. Those accrued pension is uprated in line with who were between 10 years and 13 Pensions Increase legislation. Benefits years and 5 months from their normal in alpha build up in a similar way to pension age on 1 April 2012 will switch nuvos, except that the accrual rate in into alpha sometime between 1 June 2.32%. In all cases members may opt to 2015 and 1 February 2022. All members give up (commute) pension for a lump who switch to alpha have their PCSPS sum up to the limits set by the Finance benefits ‘banked’, with those with Act 2004. earlier benefits in one of the final salary sections of the PCSPS having those The partnership pension account is a benefits based on their final salary stakeholder pension arrangement. The when they leave alpha. (The pension employer makes a basic contribution figures quoted for officials show of between 8% and 14.75% (depending pension earned in PCSPS or alpha – on the age of the member) into a as appropriate. Where the official has stakeholder pension product chosen benefits in both the PCSPS and alpha by the employee from a panel of the figure quoted is the combined value providers. The employee does not of their benefits in the two schemes.) have to contribute, but where they Members joining from October 2002 do make contributions, the employer may opt for either the appropriate will match these up to a limit of 3% 47
Cash Equivalent Transfer Values Real increase in CETV A Cash Equivalent Transfer Value This reflects the increase in CETV that (CETV) is the actuarially assessed is funded by the employer. It does not capitalised value of the pension include the increase in accrued pension scheme benefits accrued by a member due to inflation, contributions paid by at a particular point in time. The the employee (including the value of benefits valued are the member’s any benefits transferred from another accrued benefits and any contingent pension scheme or arrangement) and spouse’s pension payable from the uses common market valuation factors scheme. A CETV is a payment made for the start and end of the period. by a pension scheme or arrangement Fees Paid by DIT to Non‑Executive to secure pension benefits in another Board Members pension scheme or arrangement when the member leaves a scheme Below are the annual fees plus and chooses to transfer the benefits expenses paid to the Non‑Executive accrued in their former scheme. Board Members of DIT. The total The pension figures shown relate to amounts due for the year to each the benefits that the individual has person were in the following ranges accrued as a consequence of their total (full time equivalent figures for membership of the pension scheme, non‑executives who served part of the not just their service in a senior year can be found in brackets): capacity to which disclosure applies. 2016‑17 The figures include the value of any pension benefit in another scheme or Name £000 arrangement which the member has Julie Currie 5‑10 transferred to the Civil Service pension (from 17 November 2016) (20-25) arrangements. They also include any additional pension benefit accrued to Noel Harwerth1 – the member as a result of their buying (from 1 January 2017) – additional pension benefits at their own cost. CETVs are worked out in Dr Pippa Malmgren 5‑10 accordance with The Occupational (from 17 November 2016) (15-20) Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and Simon Walker 5‑10 do not take account of any actual or (from 17 November 2016) (20-25) potential reduction to benefits resulting from Lifetime Allowance Tax which 1 Noel Harwerth is paid by UKEF. Please refer to UKEF accounts for full details. may be due when pension benefits This table has been subject to audit. are taken. 48 Department for International Trade Annual Report and Accounts 2016-17
Numbers and Costs of People Engaged in Delivering DIT’s Objectives The cost of people engaged in delivering DIT’s objectives is disclosed in the table below. DIT is recharged the full costs of all FCO staff overseas and at DIT HQ who spend more than 50% of their role on DIT objectives. We are also recharged for the full costs of MoD employees working in our Defence and Security Organisation (DSO).
FCO Civil Temporary Special Locally Restated servants Staff Ministers Advisors Engaged 2016‑17 2015‑16 £000 £000 £000 £000 £000 £000 £000 Wages and Salaries 51,844 2,202 167 72 45,647 99,932 86,434 Social Security Costs 4,412 39 20 9 – 4,480 3,244 Other Pension Costs 9,833 113 – 16 – 9,962 9,262 Voluntary Exit Scheme 29 – – – – 29 3,791 Total 66,118 2,354 187 97 45,647 114,403 102,731 The costs of civil servants includes both DIT employees (£46.9m,) and the costs recharged for MoD employees (£3.1m) and FCO civil servants (£16.1m), working for DIT – either at overseas posts or London HQ. This table has been subject to audit.
Average number of persons employed
The average number of whole‑time equivalent persons employed during the year was as follows:
Number of staff 2016‑17 2015‑16 Civil servants 1,166 1,112 Temporary Staff 102 63 Ministers1 3 1 Special Advisors 1 – FCO Locally Engaged 1,051 1,140 Total2 2,323 2,316 1 The Minister of State for Trade and Investment position was previously held by joint Ministers of BEIS and FCO. 2 Total does not include UKEF staff This table above has been subject to audit. 49
Sickness Absence The average working days lost through recorded sickness absence per employee and staff year is disclosed below.
Sickness Absence1 Average Working Days Lost 2016 2.1 2015 3.2 1The DIT staff year is in line with the calendar year.
Reporting of Civil Service and other compensation schemes – exit packages There were no new exit packages in 2016-17 for DIT staff (2015-16: There were 69 exit packages which cost £3,790,9222). The £29,000 in note 3 of the accounts paid to civil servants in 2016-17 includes residual costs of exit schemes agreed in 2015‑16. Redundancy and other departure costs have been paid in accordance with the provisions of the Civil Service Compensation Scheme, a statutory scheme made under the Superannuation Act 1972. Exit costs are accounted for in full in the year of departure. Where the department has agreed early retirements, the additional costs are met by the Department and not by the Civil Service pension scheme. Ill‑health retirement costs are met by the pension scheme and are not included in the table. Consultancy Consultancy spend in 2016-17 was nil (2015-16 £384k). Prior year cost related to business transformation of UKTI to the new strategy.
2 Full details of 2015-16 exit packages can be found on pg 40 of the UKTI 2015-16 Annual Report: www.gov.uk/ government/publications/uk-trade-investment-annual- report-and-accounts-2015-to-2016 50 Department for International Trade Annual Report and Accounts 2016-17
Off‑Payroll Engagements People Strategy HM Treasury required all departments Our people are at the heart of to publish details of off‑payroll everything we deliver – their expertise engagements and the assurances is integral to shaping the UK as a great sought that the correct tax is being paid. trading nation. We are committed to building on our strengths, growing Table 1: For all off-payroll engagements as of 31 March 2017, for our leadership at all levels, remaining more than £220 per day and that last for longer than six months true to our values and demonstrating excellent teamwork. We are proud of No. of existing engagements as of 31 March 2017: 284 our diverse workforce and will attract, Of which invest in, and retain the very best global No. that have existed for less than one year at time of reporting. 159 talent. The development of our people was a priority in 2016-17, to help us to No. that have existed for between one and two years at time of reporting. 60 be a confident and capable Department No. that have existed for between two and three years at time of reporting. 37 that drives growth, and is highly No. that have existed for between three and four years at time of reporting. 14 respected and proud of what it does. No. that have existed for four or more years at time of reporting. 14 Resourcing and Capability All existing off-payroll engagements, outlined above, have at some 127 As a new Department, recruitment and point been subject to a risk based assessment as to whether resourcing was a significant priority assurance is required that the individual is paying the right amount of in 2016‑17. Since the Department was tax and, where necessary, assurance has been sought. formed last July, the Department has grown in size and we continue to ensure Table 2: For all new off-payroll engagements, or those that reached that the Department has the people it six months in duration, between 1 April 2016 and 31 March 2017, needs, with the required capabilities. for more than £220 per day and that last for longer than six months Our status as a new Department No. of new engagements, or those that reached six months in 111 provided an opportunity to design and duration, between 1 April 2016 and 31 March 2017. build a new and innovative learning culture and framework. Combining the No. of the above which include contractual clauses giving the 111 cross Whitehall Civil Service Learning Department the right to request assurance in relation to income tax programmes with our own technical and National Insurance obligations. learning, we have worked to develop a No. for whom assurance has been requested. 79 skills and capability offer to our people Of which that is supported by a global learning platform, to meet the needs of our No. for whom assurance has been received. 34 global workforce. We have focused on No. for whom assurance has not been received1. 45 key cross‑departmental development No. that have been terminated as a result of assurance not being received. - priorities: building leadership capability, growing management skills, establishing professions and Table 3: For any off-payroll engagements of board members, developing core skills. and/or, senior officials with significant financial responsibility, between 1 April 2016 and 31 March 2017 No. of off-payroll engagements of board members, and/or, senior - officials with significant financial responsibility, during the financial year. No. of individuals that have been deemed “board members, 14 and/or, senior officials with significant financial responsibility”, during the financial year. This figure should include both off-payroll and on-payroll engagements. 1 The deadline for the off payroll worker to provide the assurance is early July 2017 51
Inclusion and Diversity Leadership and Talent Engaging with our People The Department for International In 2016-17, the Department focused We have a variety of communication Trade is a fully inclusive employer and heavily on leadership development channels to enable all individuals within is proud to offer the opportunities and delivered two successful events in DIT to have access to – and share – a to those individuals from across the November and December including a range of information that is relevant not diversity and inclusion spectrum conference to our senior civil servants only to their role but also to the wider including those who are living with a in DIT. We have also piloted leadership performance of DIT. These channels disability. Our policies ensured that events focusing on inclusive leadership include: all staff and directorate we offer the guaranteed interview and leadership in action. meetings, weekly all staff and senior scheme to those colleagues who meet leadership electronic bulletins We have aligned ourselves to Civil the minimum criteria for recruitment (including video), and the DIT intranet. Service talent activities and we have purposes. We provided reasonable Senior leadership are also actively completed talent assessments for adjustments and assistance to staff encouraged to cascade and share senior grades working with wider with disabilities and/or long term health information. The following table reports Civil Service on succession plans. By conditions to allow for colleagues to workforce gender diversity for DIT and Autumn 2017, we will have completed work in a comfortable environment the civil servants working for DIT. talent assessments for the remaining and deliver effectively. We supported senior grades. We have also invested colleagues to access development in the establishment of early talent programmes within the Department programmes in the Department and have and across the wider Civil Service. significant numbers of Fast Streamers In 2016-17, the Department set up 11 and Apprentices in our workforce. diversity networks including Disability, Mental Health, Women’s Group, LGBT+, People and Carers Group, EU Nationals, and Race and Ethnicity Groups. All groups now have a Senior Civil Service Champion. In December 2016 we launched our Diversity and Inclusion Committee under the chairmanship of the Director General of Trade Policy Group which meets on a monthly basis to test and support our network groups.
Workforce diversity % 2017 Female 45% Male 55%
Workforce diversity – Senior Civil Servants % 2017 Female 42% Male 58% 52 Department for International Trade Annual Report and Accounts 2016-17
Parliamentary Accountability and Audit Report
Statement of Parliamentary Supply In addition to the primary statements prepared under IFRS, the Government Financial Reporting Manual (FReM) requires DIT to prepare a Statement of Parliamentary Supply (SoPS) and supporting notes to show resource outturn against the Supply Estimate presented to Parliament, in respect of each budgetary control limit. Prior year comparatives have been restated due to the machinery of government change and in accordance with the FReM. The SoPS and related notes are subject to audit. Explanations of variances between Estimate and Outturn are given in the Financial Review on pages 20 to 22.
Summary of Resource and Capital Outturn 2016‑17 Restated 2015‑16 2016‑17 £000 Estimate Outturn £000 Outturn Voted Outturn compared with Estimate Non- Non- saving/ Voted Voted Total Voted Voted Total (excess) Total Departmental Expenditure Limit – Resource 351,414 – 351,414 344,651 – 344,651 6,763 341,542 – Capital 9,842 – 9,842 6,304 – 6,304 3,538 1,869 Annually Managed Expenditure – Resource 3,000 – 3,000 – – – 3,000 (351) – Capital – – – – – – – – Total Budget 364,256 – 364,256 350,955 – 350,955 13,301 343,060 Non‑Budget – Resource – – – – – – – – Total Non‑Budget – – – – – – – – Total Resource 354,414 – 354,414 344,651 – 344,651 9,763 341,191 Total Capital 9,842 – 9,842 6,304 – 6,304 3,538 1,869 Total 364,256 – 364,256 350,955 – 350,955 13,301 343,060 53
Net Cash Requirement 2016‑17 Restated 2015‑16 2016‑17 £000 Estimate Outturn £000 Outturn Outturn compared with Estimate saving/ Note (excess) Total Net Cash Requirement SOPS 2 362,178 341,503 20,675 334,296
Administration Costs 2016‑17 Restated 2015‑16 2016‑17 £000 Estimate Outturn £000 Outturn Outturn compared with Estimate saving/ (excess) Total Administration Costs 35,282 29,695 5,587 26,836
Figures in the areas outlined in bold are voted totals subject to Parliamentary control. In addition, although not a separate voted limit, any breach of the administration budget will also result in an excess vote.
The Notes on pages 54 to 56 support the Statement of Parliamentary Supply. 54 Department for International Trade Annual Report and Accounts 2016-17
Notes to the Statement of Parliamentary Supply
SOPS 1 Net Outturn SOPS 1.1 Analysis of Net Resource Outturn by Section
Restated 2016‑17 2015‑16 £000 £000 Outturn Estimate Outturn Administration Programme Net total compared Net Net Net to Gross Income total Gross Income total Total Total Estimate Total Spending in Departmental Expenditure Limit Voted: A. Trade development and promotion and inward investment 29,695 – 29,695 319,201 (4,245) 314,956 344,651 351,414 6,763 341,542 Annually Managed Expenditure Voted: B. Trade development and promotion and inward investment – – – – – – – 3,000 3,000 (351) Total 29,695 – 29,695 319,201 (4,245) 314,956 344,651 354,414 9,763 341,191 55
SOPS 1.2 Analysis of Net Capital Outturn by Section
Restated 2016‑17 2015‑16 £000 £000 Outturn Estimate Outturn Net total compared Net to Gross Income total Net Estimate Total Spending in Departmental Expenditure Limit Voted: A. Trade development and promotion and inward investment: 6,304 – 6,304 9,842 3,538 1,869 Total 6,304 – 6,304 9,842 3,538 1,869 56 Department for International Trade Annual Report and Accounts 2016-17
SOPS 2 Reconciliation of Net Resource Outturn to Net Cash Requirement
Net total outturn compared with estimate: savings Estimate Outturn (excess) Note £000 £000 £000 Resource Outturn SOPS 1.1 354,414 344,651 9,763 Capital Outturn SOPS 1.2 9,842 6,304 3,538 Accruals to cash adjustments Adjustments to remove non‑cash items: Depreciation, amortisation and impairment 6, 7 (2,078) (2,136) 58 National Audit Office – Auditor's remuneration 4 – (95) 95 Adjustments to reflect movements in working balances: Increase/(decrease) in receivables CF, 11 – 5,065 (5,065) (Increase)/decrease in payables and items not passing through the Statement of Comprehensive Net Expenditure CF, 12 – (12,286) 12,286 Use of Provisions 13 – – – Net cash requirements 362,178 341,503 20,675
Parliamentary Accountability disclosures Losses and Special Payments During 2016‑17 DIT made one ex-gratia payment amounting to less than £500 (2015‑16 Nil) and had no reportable losses (2015‑16 £400,000). This disclosure on losses and special payments has been subject to audit. Remote Contingent Liability DIT has no remote contingent liabilities (2015-16 Nil). Contingent liabilities which are considered greater than remote and less than probable have been disclosed per IAS 37 in note 14 of the Financial Statements. This disclosure on remote contingent liabilities has been subject to audit.
Antonia Romeo Accounting Officer 11 July 2017 57
The Certificate and Report of the Comptroller and Auditor General to the House of Commons
I certify that I have audited the financial Respective responsibilities of the Scope of the audit of the financial statements of the Department for Accounting Officer and auditor statements International Trade for the year ended 31 March 2017 under the Government As explained more fully in the An audit involves obtaining evidence Resources and Accounts Act 2000. Statement of Accounting Officer’s about the amounts and disclosures The financial statements comprise: the Responsibilities, the Accounting Officer in the financial statements sufficient Department’s Statements of is responsible for the preparation to give reasonable assurance Comprehensive Net Expenditure, of the financial statements and for that the financial statements are Financial Position, Cash Flows, being satisfied that they give a true free from material misstatement, Changes in Taxpayers’ Equity; and the and fair view. My responsibility is whether caused by fraud or error. related notes. These financial to audit, certify and report on the This includes an assessment of: statements have been prepared under financial statements in accordance whether the accounting policies are the accounting policies set out within with the Government Resources and appropriate to the Department’s them. I have also audited the Accounts Act 2000. I conducted my circumstances and have been Statement of Parliamentary Supply audit in accordance with International consistently applied and adequately and the related notes, and the Standards on Auditing (UK and Ireland). disclosed; the reasonableness of information in the Remuneration and Those standards require me and significant accounting estimates made Staff Report and the Parliamentary my staff to comply with the Auditing by the Accounting Officer; and the Accountability disclosures that is Practices Board’s Ethical Standards for overall presentation of the financial described in those reports and Auditors. statements. In addition I read all the disclosures as having been audited. financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by me in the course of performing the audit. If I become aware of any apparent material misstatements or inconsistencies I consider the implications for my certificate. I am required to obtain evidence sufficient to give reasonable assurance that the Statement of Parliamentary Supply properly presents the outturn against voted Parliamentary control totals and that those totals have not been exceeded. The voted Parliamentary control totals are Departmental Expenditure Limits (Resource and Capital), Annually Managed Expenditure (Resource and Capital), Non-Budget (Resource) and Net Cash Requirement. I am also required to obtain evidence sufficient to give reasonable assurance that the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them. 58 Department for International Trade Annual Report and Accounts 2016-17
Opinion on regularity Opinion on other matters Report In my opinion, in all material respects: In my opinion: I have no observations to make on these financial statements. • the Statement of Parliamentary • the parts of the Remuneration and Supply properly presents the Staff Report and the Parliamentary outturn against voted Parliamentary Accountability disclosures to control totals for the year ended 31 be audited have been properly March 2017 and shows that those prepared in accordance with HM totals have not been exceeded; and Treasury directions made under the Government Resources and • the expenditure and income Accounts Act 2000; and recorded in the financial statements have been applied to the purposes • the information given in the Sir Amyas C E Morse intended by Parliament and the Performance Report and the 13 July 2017 financial transactions recorded in Accountability Report for the Comptroller and Auditor General the financial statements conform to financial year for which the National Audit Office the authorities which govern them. financial statements are prepared 157-197 Buckingham Palace Road is consistent with the financial Opinion on financial statements Victoria statements. London In my opinion: Matters on which I report by SW1W 9SP • the financial statements give a true exception and fair view of the state of the I have nothing to report in respect of the Department’s affairs as at 31 March following matters which I report to you 2017 and of the Department’s net if, in my opinion: operating cost for the year then ended; and • adequate accounting records have not been kept or returns adequate • the financial statements have been for my audit have not been received properly prepared in accordance from branches not visited by my with the Government Resources staff; or and Accounts Act 2000 and HM Treasury directions issued • the financial statements and the thereunder. parts of the Remuneration and Staff Report and the Parliamentary Accountability disclosures to be audited are not in agreement with the accounting records and returns; or • I have not received all of the information and explanations I require for my audit; or • the Governance Statement does not reflect compliance with HM Treasury’s guidance. 59
Financial Statements
Statement of Comprehensive Net Expenditure For the Year Ended 31 March 2017
Restated 2016‑17 2015‑16 Note £000 £000 Staff costs 3 114,403 102,731 Outsourced activity 4 71,291 86,959 Recharges from other government departments 4 51,748 51,931 Promotion activity 4 27,524 17,840 Events 4 25,997 25,778 Grants 4 22,303 26,867 Other costs 4 35,630 35,587 Income 5 (4,245) (6,502) Net Operating Cost 344,651 341,191 Net gain/(loss) on revaluation – – Total Comprehensive Net Expenditure 344,651 341,191
The Notes on pages 63 to 78 form part of these Accounts. 60 Department for International Trade Annual Report and Accounts 2016-17
Statement of Financial Position As at 31 March 2017
Restated 2017 2016 Note £000 £000 Non‑current Assets Property, plant and equipment 6 1,217 1,388 Intangible assets 7 6,743 2,404 Total non‑current assets 7,960 3,792
Current assets Trade and other receivables 11 15,359 10,294 Cash and cash equivalents 10 17,347 5,849 Total current assets 32,706 16,143 Total assets 40,666 19,935
Current liabilities Provision 13 – – Trade and other payables 12 (93,509) (69,725) Total current liabilities (93,509) (69,725)
Total assets less net current liabilities (52,843) (49,790)
Taxpayers Equity and Other Reserves General fund (52,843) (49,790) Total equity (52,843) (49,790)
Antonia Romeo Accounting Officer 11 July 2017
The Notes on pages 63 to 78 form part of these Accounts. 61
Statement of Cash Flows For the Year Ended 31 March 2017
Restated 2017 2016 Note £000 £000 Cash flows from operating activities Net operating cost (344,651) (341,191) Adjustments for non‑cash transactions 4 2,231 2,172 (Increase)/Decrease in trade and other receivables 11 (5,065) 3,119 Increase/(Decrease) in trade payables 12 23,784 (11,877) Use of provisions 13 – (351) Less movements in payables relating to items not passing through the Statement of Comprehensive Net Expenditure (11,498) 15,701 Net cash outflows from operating activities (335,199) (332,427)
Cash flows from investing activities Purchases of property, plant and equipment 6 (102) (1,038) Purchases of intangible assets 7 (6,202) (831) Net cash outflows from investing activities (6,304) (1,869)
Cash flows from financing activities From the Consolidated Fund (Supply) – Current year SoCTE 358,850 318,595 Net financing 358,850 318,595
Net increase/(decrease) in cash and cash equivalents in the period before adjustment for receipts and payments to the Consolidated Fund 17,347 (15,701) Payments of amounts due to the Consolidated Fund (5,849) – Net increase/(decrease) in cash and cash equivalents in the period after adjustment for receipts and payments to the Consolidated Fund 11,498 (15,701)
Cash and cash equivalents at the beginning of the period 10 5,849 21,550 Cash and cash equivalents at the end of the period 10 17,347 5,849
The Notes on pages 63 to 78 form part of these Accounts. 62 Department for International Trade Annual Report and Accounts 2016-17
Statement of Changes in Taxpayers’ Equity For the Year Ended 31 March 2017
Restated General Fund Note £000 Balance at 1 April 2015 (Restated) (42,980)
Net Parliamentary Funding – drawn down CF 318,595 Net Parliamentary Funding – deemed CF 21,550 Supply (payable)/receivable adjustment 12 (5,849) Comprehensive Net Expenditure for Year (341,191) Non‑cash items National Audit Office – Auditor's remuneration 4 85 Balance at 31 March 2016 (Restated) (49,790)
Net Parliamentary Funding – drawn down CF 358,850 Net Parliamentary Funding – deemed CF – Supply (payable)/receivable adjustment 12 (17,347) Comprehensive Net Expenditure for Year (344,651) Non‑cash items National Audit Office – Auditor's remuneration 4 95 Balance at 31 March 2017 (52,843)
The Notes on pages 63 to 78 form part of these Accounts. 63
Notes to the 2016‑17 Resource Accounts
1. Statement of Accounting Policies 1.1 Accounting convention 1.3 Estimates and Judgements These financial statements have These accounts have been prepared The preparation of DIT’s financial been prepared in accordance with on a going concern basis under the statements requires management the 2016‑17 Government Financial historical cost convention modified to to make judgements, estimates and Reporting Manual (FReM), issued account for the fair value revaluation assumptions that affect the reported by HM Treasury. The accounting of property, plant and equipment, amounts of assets and liabilities, policies contained in the FReM apply and intangible assets as described in income and expenditure. The estimates International Financial Reporting paragraphs 1.8 to 1.11. and associated assumptions are Standards (IFRS) as adapted, or based on historical experience and 1.2 Basis of accounting interpreted, for the public‑sector other factors, including expectations context. Where the FReM permits These accounts cover all activities or future events that are believed to be a choice of accounting policy, the for which the Accounting Officer of reasonable under the circumstances. accounting policy which is judged to DIT has principal Accounting Officer The results of these factors form the be most appropriate to the particular (AO) responsibility. The Government basis of making judgements about circumstances of DIT, for the purpose announced the creation of DIT in carrying values of assets and liabilities of giving a true and fair view has July 2016. The new Department that are not readily apparent from been selected. The particular policies incorporates UKTI, Trade Policy other sources. Uncertainty about adopted by DIT are described below. Group from the former Department for these assumptions and estimates They have been applied consistently in Business Innovation and Skills and the could result in outcomes that require dealing with items that are considered GREAT Campaign from Cabinet Office. an adjustment to the carrying value of material to the accounts. the asset or liability. Where applicable, Machinery of Government changes, these uncertainties are disclosed in the In addition to the primary statements which involve the transfer of functions Notes to the Accounts. prepared under IFRS, the FReM also between two or more parts of the requires DIT to prepare additional public sector/government departments, Significant judgement areas include primary statements, the Statement of are required to be accounted for using Incentive Payments. These estimates Parliamentary Supply and supporting merger accounting principles where are based on year‑end export win and notes which show Outturn against the transfer is between departmental CDMS data. The data is verified before Estimate in terms of the Net Resource groups within central government actual payments are made. Historically, Requirement and the Net Cash in accordance with the FReM. The these estimates and judgements have Requirement. operating results and cash flows been materially accurate. of all functions transferred into the There were no material estimates or Department are included in these judgements made at 31 March 2017 Accounts from the beginning of the that could result in outcomes that financial year in which the transfer require a material adjustment to the takes place. Where material the prior carrying value of assets, liabilities, year comparatives are restated as income or expenditure. appropriate, so that it appears that the entity has always existed in its 1.4 Operating Income present form. DIT has not presented a Operating income is income which statement of financial position as at relates directly to the operating 1 April 2015 as the effect of adding activities of DIT and is measured at the TPG and GREAT to existing functions fair value of consideration received or of UKTI is not material. The restatement receivable. Income is only recognised at 1 April 2015 is however shown within once the work or service has been note 17. provided and principally comprises fees and charges for services provided to external customers. 64 Department for International Trade Annual Report and Accounts 2016-17
1.5 Administration and Programme Some employees are members of 1.9 Depreciation Income and Expenditure defined contribution plans. A defined Property, plant and equipment are contribution plan is a post‑employment The organisational support provided by depreciated at rates calculated to write benefit plan under which an entity pays the DIT corporate services functions, them down to their estimated residual fixed contributions into a separate Ministerial Strategy Directorate and value on a straight‑line basis over their entity and will have no legal or the policy work completed by TPG are estimated useful lives. Tangible assets constructive obligation to pay further classified as administration. All other are normally depreciated over the amounts. Obligations for contributions business activities are considered following periods: to defined contribution pension plans front line activity and are, therefore, are recognised as an employee programme activity. Assets under Not depreciated until benefit expense in the Statement of construction assets are in use 1.6 Pensions Comprehensive Net Expenditure in the periods during which services are IT assets Three to five years Past and present employees of the rendered by employees. Department are generally covered Office Five years by the provisions of Civil Service 1.7 Value Added Tax (VAT) machinery pensions. Civil Service pensions are VAT is accounted for in the Accounts. Furniture, Five years defined benefit plans, however, there is Amounts are shown net of VAT except: fixtures and insufficient information at an individual fittings employer level to allow DIT to account • Irrecoverable VAT is charged to the for it as such and instead it is treated Statement of Comprehensive Net 1.10 Intangible Assets as a defined contribution scheme in Expenditure, and included under the these accounts. relevant expenditure category. Intangible assets are stated at the amortised historic cost as a proxy for The Department recognises the • Irrecoverable VAT on the purchase fair value and are reviewed annually expected cost of these elements on a of an asset is included in additions. for impairment. The minimum level of systematic and rational basis over the The net amount due to, or from HM capitalisation of an intangible asset is period during which it benefits from Revenue and Customs in respect £1,000. This method of valuation has employees’ services by payment to of VAT is included within payables been chosen because the assets have the Civil Service pension schemes of or receivables on the Statement of no value in use. amounts calculated on an accruals Financial Position. basis. Liability for payment of future Software licences are amortised on benefits is a charge on theCivil Service 1.8 Property, Plant and Equipment a straight‑line basis over the shorter pension schemes. of the term of the licence and the In accordance with the FReM, DIT useful economic life (three to five Pension benefits to ministers are has opted to value property, plant and years). Intangible assets are normally provided by the Parliamentary equipment on a depreciated historical depreciated over the following periods: Contributory Pension Fund (PCPF). cost basis, as a proxy for their current Further details are provided in the value in existing use. This method of Development Not depreciated Remuneration Report. valuation has been chosen because costs until assets are DIT has a large number of relatively The Department is recharged the cost in use small‑value items, with short useful of pension contributions payable for lives. Software licences Three to five years FCO civil servants who are working for the Department in the year and the DIT’s capitalisation threshold for Website Four to five years full cost has been provided for in the property, plant and equipment is IT assets Three to five years accounts. £1,000, except for furniture assets, where all expenditure in one financial year is pooled and capitalised, and IT hardware, where a pack of equipment purchased with a cost in excess of £1,000, is capitalised as one asset. 65
1.11 Impairments 1.15 Foreign Exchange The carrying value of DIT’s assets is Transactions which are denominated reviewed each Statement of Financial in a foreign currency are translated into Position date to determine whether sterling at the exchange rate ruling on there is any indication of impairment. If the date of the transaction. Current any such indication exists, the assets’ assets and liabilities denominated recoverable amount is estimated in in foreign currency are translated accordance with IAS 36. into sterling at the date on which they are recorded in the accounts, An impairment loss is recognised on average no more than 30 days whenever the recoverable amount of an prior to the Statement of Financial asset or its cash‑generating unit is less Position date. DIT does not have than the carrying amount. Impairment the authority to undertake exchange losses are recognised in the Statement rate risk management (hedging) of Comprehensive Net Expenditure. and as a consequence all gains or 1.12 Trade and Other Receivables losses on exchange differences are recognised directly in the Statement of Trade and other receivables are Comprehensive Net Expenditure. recognised initially at fair value, less any provision for impairment. 1.16 Impending Application of Newly A provision for impairment of trade Issued Accounting Standard Not Yet receivables is established when there Effective is evidence that DIT will not be able to recover all amounts due in accordance DIT provides disclosure that it has with contracts. not yet applied a new accounting standard, and known or reasonably 1.13 Trade and Other Payables estimable information relevant to assessing the possible impact that the Trade and other payables are initial application of the new standard recognised at fair value, which will have on the resource accounts is represent liabilities for goods and not available. DIT has also not early services provided to DIT prior to the adopted any accounting standards. financial year end that are unpaid. Also, there were no new standards Trade and other payables are issued for 2016‑17 and not applied non‑interest bearing and are usually which would materially affect the paid within 10 working days, thus their resource accounts. carrying value approximates their fair value. 1.14 Cash and Cash Equivalents Cash and cash equivalents comprise cash at bank and in hand. The carrying amount of these assets approximates their fair value. 66 Department for International Trade Annual Report and Accounts 2016-17
2. Statement of Operating Cost by Business Group
Restated 2016‑17 2015‑16 £000 £000 Gross Income Net Gross Income Net International Trade and Investment 264,454 (3,897) 260,557 268,948 (6,073) 262,875 Centrally Managed 43,534 – 43,534 48,165 – 48,165 Trade Policy Group 17,383 (307) 17,076 15,273 (276) 14,997 GREAT 4,023 (11) 4,012 3,111 (96) 3,015 Corporate Services & Ministerial Strategy 19,502 (30) 19,472 12,196 (57) 12,139 Total Comprehensive Net Expenditure 348,896 (4,245) 344,651 347,693 (6,502) 341,191
Departments are required to apply IFRS 8 Operating Segments. This requires Departments to identify their operating segments based on their main areas of activity reported to the Chief Operating Decision Maker (CODM). DIT’s CODM is the Accounting Officer. She receives financial information at aggregate level as well as information on outcomes relating to five directorates groups; Corporate Services and Ministerial Strategy, Centrally Managed, International Trade and Investment, Trade Policy Group and GREAT. These are measured on the same basis as for financial reporting purposes in the Statement of Comprehensive Net Expenditure. The primary activity of each segment is as follows: • International Trade and Investment: Provides support for exporters and facilitates inward and outward investment. • Centrally Managed: Recharges from the FCO for the use of overseas shared services and estates. • GREAT: The programme team that runs the cross‑government campaign to promote trade, investment, tourism and study in the UK and helps businesses sell overseas. • Trade Policy: Develops and negotiates free trade agreements and market access deals with non‑EU countries. • Corporate Services & Ministerial Strategy: Provides corporate support, strategic oversight and supports Ministers in order to ensure that DIT has the capabilities to deliver the Government’s international trade policies. The income and expenditure reported against reportable segments for 2015‑16 have been restated to reflect the changes in responsibilities arising from the Machinery of Government changes.
3. Staff Costs
Restated 2016-17 2015-16 £000 £000 Wages and Salaries 99,932 86,434 Social Security Costs 4,480 3,244 Other Pension Costs 9,962 9,262 Voluntary Exit Scheme 29 3,791 Total 114,403 102,731 For further information on staff costs and numbers, please see the Remuneration and Staff Report on page 48. 67
4. Other Costs
Restated 2016‑17 2015‑16 £000 £000 Outsourced Trade Services 39,621 48,436 Outsourced Investment Services 21,405 32,839 Outsourced Programme Activity 10,265 5,684 FCO Platform Charge 43,534 48,165 BEIS Overhead Recharge 8,214 3,766 Promotion activity 27,524 17,840 Events 25,997 25,778 Grants 22,303 26,867 Travel and subsistence 13,927 13,424 Agency and Temporary Staff 6,438 3,837 IT expenditure 5,663 5,939 Training and other staff costs 2,967 2,559 Market Research and evaluation 1,277 993 Other costs 3,127 6,663 Non-cash items Depreciation 273 333 Amortisation 1,863 1,668 Impairment – 86 National Audit Office – Auditor's remuneration 95 85 2,231 2,172 Total Other costs 234,493 244,962
5. Income
Restated 2016‑17 2015‑16 £000 £000 Fees and charges to external customers for Overseas Market Introduction Services (OMIS) 2,666 3,254 Income from Other Government Departments 104 – Other income 1,475 3,248 Total Income 4,245 6,502 68 Department for International Trade Annual Report and Accounts 2016-17
6. Property, Plant and Equipment
2016‑17 Furniture, Information Office Fixtures and Technology Machinery Fittings Total £000 £000 £000 £000 Cost or valuation At 1 April 2016 1,380 44 891 2,315 Additions 102 – – 102 Disposals (4) (26) – (30) Impairment – – – – Transfers – – – – At 31 March 2017 1,478 18 891 2,387
Depreciation At 1 April 2016 (515) (44) (368) (927) Charge in year (95) – (178) (273) Disposals 4 26 – 30 Impairment – – – – Transfers – – – – At 31 March 2017 (606) (18) (546) (1,170)
Carrying amount at 31 March 2017 872 – 345 1,217
Asset financing Owned 872 – 345 1,217 Carrying amount at 31 March 2017 872 – 345 1,217 69
2015‑16 Restated Furniture, Information Office Fixtures and Technology Machinery Fittings Total £000 £000 £000 £000 Cost or valuation At 1 April 2015 433 47 820 1,300 Additions 967 – 71 1,038 Disposals (20) (3) – (23) Impairment – – – – Transfers – – – – At 31 March 2016 1,380 44 891 2,315
Depreciation At 1 April 2015 (295) (10) (226) (531) Charge in year (154) (1) (178) (333) Disposals 20 3 – 23 Impairment (86) – – (86) Transfer – (36) 36 – At 31 March 2016 (515) (44) (368) (927)
Carrying amount at 31 March 2016 865 – 523 1,388
Asset financing Owned 865 – 523 1,388 Carrying amount at 31 March 2016 865 – 523 1,388 70 Department for International Trade Annual Report and Accounts 2016-17
7. Intangible Assets
2016‑17 Development Software Information costs licence Website Technology Total £000 £000 £000 £000 £000 Cost or valuation At 1 April 2016 742 1,192 2,169 5,595 9,698 Additions 4,495 – – 1,707 6,202 Disposals – (1,186) (2,169) (51) (3,406) Reclassifications (3,125) – 2,696 429 – At 31 March 2017 2,112 6 2,696 7,680 12,494
Amortisation At 1 April 2016 – (1,192) (2,156) (3,946) (7,294) Charge in year – – (238) (1,625) (1,863) Disposals – 1,186 2,169 51 3,406 At 31 March 2017 – (6) (225) (5,520) (5,751)
Carrying amount at 31 March 2017 2,112 – 2,471 2,160 6,743
Asset financing Owned 2,112 – 2,471 2,160 6,743 Carrying amount at 31 March 2017 2,112 – 2,471 2,160 6,743 71
2015‑16 Restated Development Software Information costs licence Website Technology Total £000 £000 £000 £000 £000 Cost or valuation At 1 April 2015 – 1,212 2,169 5,526 8,907 Additions 742 – – 89 831 Disposals – (20) – (20) (40) Reclassifications – – – – – At 31 March 2016 742 1,192 2,169 5,595 9,698
Amortisation At 1 April 2015 – (941) (2,135) (2,590) (5,666) Charge in year – (271) (21) (1,376) (1,668) Disposals – 20 – 20 40 At 31 March 2016 – (1,192) (2,156) (3,946) (7,294)
Carrying amount at 31 March 2016 742 – 13 1,649 2,404
Asset financing Owned 742 – 13 1,649 2,404 Carrying amount at 31 March 2016 742 – 13 1,649 2,404 72 Department for International Trade Annual Report and Accounts 2016-17
8. Capital and other commitments 8.1 Capital commitments As at 31 March 2017 DIT did not have any capital commitments (31 March 2016: Nil). 8.2 Other commitments
Restated 31 March 2017 31 March 2016 £000 £000 Total other commitments Non-cancellable contract Not later than one year 1,297 1,297 Later than one year and not later than five years 1,297 Later than five years – – 1,297 2,594
The Department has a non-cancellable IT contract for the application development, service management and hosting for the Export Licensing website. This was signed by BEIS and transferred to DIT as part of the Machinery of Government changes disclosed in Note 17. 9. Financial Instruments As the cash requirements of the Department are met through the Estimates process, financial instruments play a more limited role in creating and managing risk than would apply to a non‑public sector body of a similar size. The majority of financial instruments relate to contracts for non‑financial items in line with the Department’s expected purchase and usage requirements and the Department is therefore exposed to little credit, liquidity or market risk. Due to the largely non‑trading nature of DIT’s activities and the way in which Government Departments are financed, DIT is not exposed to the degree of financial risk faced by business entities. Financial assets and liabilities are generated by day‑to‑day operational activities and are not held to change the risks facing DIT in undertaking its activities. 73
10. Cash and Cash Equivalents
31 March 2017 31 March 2016 £000 £000 Balance at 1 April 5,849 21,550 Net change in cash and cash equivalents 11,498 (15,701) Balance 17,347 5,849
The following balances were held at: Government banking service 17,347 5,849 Balance 17,347 5,849
11. Trade Receivables and Other Current Assets
Restated 31 March 2017 31 March 2016 £000 £000 Amounts falling due within one year Trade receivables 2,350 1,295 VAT 7,060 4,211 Other receivables 571 445 Prepayments and accrued income 5,378 4,343 Total 15,359 10,294
12. Trade Payables and Other Current Liabilities
Restated 31 March 2017 31 March 2016 £000 £000 Amounts falling due within one year Trade payables 13,194 4,811 FCO Accrual 28,434 21,294 Accruals 34,367 37,541 Deferred income 167 230 Amounts issued from the Consolidated Fund for Supply but not spent at year end 17,347 5,849 Total 93,509 69,725 74 Department for International Trade Annual Report and Accounts 2016-17
13. Provisions
31 March 2017 31 March 2016 £000 £000 Balance as at 1 April – 351 Provided in the year – – Provisions utilised in the year – (351) Total – –
The 2015‑16 brought forward provision relates to contract incentive payments which materialised in 2014‑15 and was paid to the outsourced service provider in 2015‑16.
14. Contingent Liabilities The Department has the following contingent liabilities for which the risk of crystallisation is considered greater than remote but is not thought probable. Amounts disclosed reflect the highest reasonable estimate of the possible liability. These are summarised by the nature and purpose of the contingent liability:
31 March 2017 31 March 2016 £000 £000 Quantifiable contingent liabilities disclosed under IAS 37 Paid in capital subscription for the Common Fund for Commodities (CFC) Government is committed to the payment of a subscription of £2.24m, in the form of Promissory Notes to be redeemed on request by the fund. 2,240 2,400 Callable capital subscription for CFC Government is committed to the payment of a subscription of £1.96m to the fund. 1,960 1,960 4,200 4,360
The Department has a contingent liability of £4.2m to the CFC; we are committed to pay should their commitments/liabilities exceed their available resources. 75
15. Related Party Transactions 16. Events after the Reporting Period 17. Machinery of Government (MoG) change No Minister, members of the DIT Board, There have been no events after the key manager or other related party has reporting period and up to the date the The Department for International Trade undertaken any material transactions accounts were authorised for issue was created on 13 July 2016 and gained with DIT during the year. requiring an adjustment to the financial legal recognition as a department on 9 statements. The Accounting Officer November 2016. The new Department Antonia Romeo’s husband is Managing authorised these financial statements integrated UK Trade & Investment Director of Oliver Wyman Americas. DIT for issue on the date that they were with Trade Policy Group function had no transactions with Oliver Wyman certified by the Comptroller and Auditor from BEIS and the GREAT campaign Americas in 2016-17. General. from the Cabinet Office. Prior year DIT has had transactions with other comparatives have been restated to Government Departments, central include these transferring functions of Government bodies or trading funds. the Department as from 1 April 2016, The material transactions have been with comparative information from with the FCO, BEIS, the Ministry of 1 April 2015. The impact can be seen Defence, Cabinet Office, Visit Britain on pages 76 to 78. and UK SBS. 76 Department for International Trade Annual Report and Accounts 2016-17
Statement of Comprehensive Net Expenditure For the Year Ended 31 March 2016
Trade Policy Restated UKTI GREAT Group DIT £000 £000 £000 £000 Staff costs 95,322 604 6,805 102,731 Other costs 233,987 2,507 8,468 244,962 Income (6,130) (96) (276) (6,502) Total Comprehensive Net Expenditure 323,179 3,015 14,997 341,191 77
Statement of Financial Position As at 31 March 2016
Trade Policy Restated UKTI GREAT Group DIT £000 £000 £000 £000 Non‑Current Assets Property, plant and equipment 601 – 787 1,388 Intangible Assets 2,333 – 71 2,404
Current Assets Trade and other receivables 6,703 47 3,544 10,294 Cash and cash equivalents 5,849 – – 5,849
Current Liabilities Provision – – – – Trade and other payables (68,232) (446) (1,047) (69,725)
Total assets less current liabilities (52,746) (399) 3,355 (49,790)
Taxpayers Equity and Other Reserves General Fund (52,746) (399) 3,355 (49,790) Total equity (52,746) (399) 3,355 (49,790) 78 Department for International Trade Annual Report and Accounts 2016-17
Statement of Financial Position As at 1 April 2015
Trade Policy Restated UKTI GREAT Group DIT £000 £000 £000 £000 Non‑Current Assets Property, plant and equipment 762 – 7 769 Intangible Assets 3,241 – – 3,241
Current Assets Trade and other receivables 9,054 – 4,359 13,413 Cash and cash equivalents 21,550 – – 21,550
Current Liabilities Provision (351) – – (351) Trade and other payables (74,159) (178) (7,265) (81,602)
Total assets less current liabilities (39,903) (178) (2,899) (42,980)
Taxpayers Equity and Other Reserves General Fund (39,903) (178) (2,899) (42,980) Total equity (39,903) (178) (2,899) (42,980)
79
Annex A Sector Sponsorship
The Department continues to follow strictly the recommendations of the Committee on Standards in Public Life and Cabinet Office guidelines on handling sponsorship arrangements with the private sector During 2016–17, DIT received the following private‑sector sponsorship (only sponsorship exceeding £5,000 for a single event is shown here).
Sponsorship table of amounts received during 2016‑17 Sponsor Amount (£) Event Note Kazakhstan TV Non‑monetary estimated value 8,000 Astana Expo 2017 ICAEW 10,000 Astana Expo 2017 Ventola Projects Non‑monetary estimated value 10,000 Astana Expo 2017 First Magazine Ltd Non‑monetary estimated value 15,000 Astana Expo 2017 Sysco AV Non‑monetary estimated value 50,000 Astana Expo 2017 Vitol SA 200,000 Astana Expo 2017 Shell Kazakhstan BV 350,000 Astana Expo 2017 WNY Non‑monetary estimated value 495,000 Astana Expo 2017 AstraZeneca 17,614 Bio‑Investor Conference 2016 Investec 7,715 Brazilian Pension Fund Mission to the UK British Airways 10,292 British Airways Sponsorship – Oscar Event British Aerospace and 30,342 British House Electronics Systems Pvt Ltd KBZ Group 5,279 Burma Trade and Investment Conference 2016 Supreme Group 5,390 Burma Trade and Investment Conference 2016 Prudential Holdings 10,262 Burma Trade and Investment Conference 2016 Pacific High Technology 10,349 Burma Trade and Investment Conference 2016 Services Kanbawza Group 21,002 Burma Trade and Investment Conference 2016 Business Link Japan 5,512 DIT Asset Management Seminar UK Fashion and Textile 9,500 DIT Fashion Mission to Japan Association AOK Events 10,000 Exporting is Great Latin America Roadshow Farnborough International Ltd Non‑monetary estimated value 426,000 Farnborough International Airshow Guiyang Government 6,233 Guiyang Big Data Summit and Expo Guiyang Government 6,417 Guiyang Big Data Summit and Expo Guiyang Government 8,469 Guiyang Big Data Summit and Expo University of Manchester 15,698 Innovate UK British Standards Institution 15,739 Innovate UK Research Councils UK 60,000 Innovate UK MBDA 5,000 Miedzynarodowy Salon Przemyslu Obronnego, Poland exhibition Thales UK 5,000 Miedzynarodowy Salon Przemyslu Obronnego, Poland exhibition 80 Department for International Trade Annual Report and Accounts 2016-17
Sponsor Amount (£) Event Note AstraZeneca 22,883 Miscellaneous Mosimann’s 7,597 Milan Expo 2015 Ogilvy Non‑monetary estimated value 8,330 Olympic Games Rio 2016 Jaguar Land Rover Non‑monetary estimated value 10,000 Olympic Games Rio 2016 Boots Non‑monetary estimated value 10,400 Olympic Games Rio 2016 IOASYS Ltd Non‑monetary estimated value 11,000 Olympic Games Rio 2016 BBC Non‑monetary estimated value 12,000 Olympic Games Rio 2016 Skol Non‑monetary estimated value 16,418 Olympic Games Rio 2016 PSP Logistics Non‑monetary estimated value 20,000 Olympic Games Rio 2016 Aggreko Non‑monetary estimated value 30,000 Olympic Games Rio 2016 Shell Kazakhstan BV 30,341 Olympic Games Rio 2016 Sage Non‑monetary estimated value 32,000 Olympic Games Rio 2016 Vitol Non‑monetary estimated value 48,000 Olympic Games Rio 2016 Diageo Non‑monetary estimated value 65,000 Olympic Games Rio 2016 Innovision Non‑monetary estimated value 175,000 Olympic Games Rio 2016 Financial Times Non‑monetary estimated value 270,000 Olympic Games Rio 2016 Al Rayan Bank Non‑monetary estimated value 2,000 Qatar Investment Conference 2017 IKON Gallery Non‑monetary estimated value 5,000 Qatar Investment Conference 2017 The Edge Pictures Non‑monetary estimated value 5,000 Qatar Investment Conference 2017 The Premier League Non‑monetary estimated value 7,500 Qatar Investment Conference 2017 Aston Martin Non‑monetary estimated value 12,500 Qatar Investment Conference 2017 Airbus Non‑monetary estimated value 15,000 Qatar Investment Conference 2017 Rolls Royce Non‑monetary estimated value 15,000 Qatar Investment Conference 2017 University of Birmingham Non‑monetary estimated value 40,000 Qatar Investment Conference 2017 Serco Group PLC 25,000 Qatar UK Business Investment Forum Shakespeare Martineau 45,000 Qatar UK Business Investment Forum Multiplex Middle East 50,000 Qatar UK Business Investment Forum QinetiQ 6,000 Security and Policing Exhibition ADS Group Ltd. Non‑monetary estimated value 30,000 Security and Policing Exhibition Vodafone Mobile Service Ltd 10,595 Siat Expo 2017 Equiniti Ltd 5,278 Tech Summit British Aerospace and 8,637 Tech Summit Electronics Systems Pvt Ltd De La Rue Holdings Ltd 20,488 Tech Summit Turner & Townsend 8,441 UK‑Brazil – Investment & innovation Consultoria Limitada Vertu 11,445 UKTI QBP Beijing Shell Brasil Petroleo Ltda 23,795 Miscellaneous 81
Annex B Core Tables
Admin Administration budgets
Restated Restated Restated Restated 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17 2017‑18 2018‑19 2019-20 Outturn Outturn Outturn Outturn Outturn Plan Plan Plan £000 £000 £000 £000 £000 £000 £000 £000 Spending in Administration budgets Voted: A. Trade development and promotion and inward investment 47,494 42,115 20,191 26,836 29,695 71,430 68,530 67,430 Total Administration expenditure 47,494 42,115 20,191 26,836 29,695 71,430 68,530 67,430
Resource Past, current and future departmental resource spending
Restated Restated Restated Restated 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17 2017‑18 2018‑19 2019-20 Outturn Outturn Outturn Outturn Outturn Plan Plan Plan £000 £000 £000 £000 £000 £000 £000 £000 Spending in Department Expenditure Limit (DEL) Voted: A. Trade development and promotion and inward investment 149,881 205,882 279,419 341,542 344,651 364,259 337,881 337,433 Total Resource DEL 149,881 205,882 279,419 341,542 344,651 364,259 337,881 337,433 Spending in Annually Managed Expenditure (AME) Voted: B. Trade development and promotion and inward investment – 355 (4) (351) – 3,000 3,000 3,000 Total Resource AME – 355 (4) (351) – 3,000 3,000 3,000
Total Resource 149,881 206,237 279,415 341,191 344,651 367,259 340,881 340,433 82 Department for International Trade Annual Report and Accounts 2016-17
Capital Past, current and future departmental resource spending
Restated Restated Restated Restated 2012‑13 2013‑14 2014‑15 2015‑16 2016‑17 2017‑18 2018‑19 2019-20 Outturn Outturn Outturn Outturn Outturn Plan Plan Plan £000 £000 £000 £000 £000 £000 £000 £000 Spending in Department Expenditure Limit (DEL) Voted: A. Trade development and promotion and inward investment 1,557 2,511 1,619 1,869 6,304 6,660 3,930 3,721 Total Capital DEL 1,557 2,511 1,619 1,869 6,304 6,660 3,930 3,721 Spending in Annually Managed Expenditure (AME) Voted: B. Trade development and promotion and inward investment – – – – – – – – Total Capital AME – – – – – – – –
Total Capital 1,557 2,511 1,619 1,869 6,304 6,660 3,930 3,721 83 gov.uk/dit
The UK’s Department for International Legal disclaimer Trade (DIT) has overall responsibility for Whereas every effort has been made promoting UK trade across the world to ensure that the information in this and attracting foreign investment to document is accurate, the Department our economy. We are a specialised for International Trade does not accept government body with responsibility for liability for any errors, omissions or negotiating international trade policy, misleading statements, and no warranty supporting business, as well as delivering is given or responsibility accepted an outward-looking trade diplomacy as to the standing of any individual, strategy. firm, company or other organisation mentioned. © Crown copyright 2017 This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives. gov.uk/doc/open‑government‑licence/ version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: [email protected]. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. This publication is available at www.gov.uk/government/publications Any enquiries regarding this publication should be sent to us at Department for International Trade, Central Finance Team, 3 Whitehall Place, London, SW1A 2AW