Annual Report and Accounts 2019–20

The HOUSE of COMMONS: Administration

Annual Report and Accounts 2019–20

(for the year ended 31 March 2020)

Presented to the House of Commons pursuant to Section 1(3) of the House of Commons (Administration) Act 1978 and Section 3 (as amended) of the House of Commons (Administration) Act 1978 Ordered by The House of Commons to be printed 21 July 2020

Published by Authority of the House of Commons

HC 580 © Parliamentary Copyright House of Commons 2020

This publication may be reproduced under the terms of the Open Parliament Licence, which is published at www.parliament.uk/site-information/copyright/ Contents

Performance Report 10

Overview 10 Joint foreword by the Clerk of the House and the Director General 10 Who we are 12 Our strategy 13 Our corporate culture 15 What we do 17 Finance summary 2019-20 18 Performance summary 2019-20 19

Performance Analysis 23 Facilitating effective scrutiny and debate 23 Involving and inspiring the public 24 Securing Parliament’s future 27 Creating a diverse and inclusive working environment 29 How we measure performance 31 Other corporate reporting 31

Accountability Report 40

Corporate Governance 40 Statement of Accounting Officer’s Responsibilities 40 Governance Statement 41

Remuneration and Staff Report 64 a) Remuneration policy 64 b) Staff Report 70 Parliamentary Accountability and Audit Report 75 a) Statement of Parliamentary Supply 75 b) Statement of Parliamentary Supply Commentary 78

Parliamentary Accountability Disclosures 85 a) Losses and special payments 85 b) Fees and Charges 85 c) Remote Contingent Liabilities 86

Certificate and Report of the Comptroller and Auditor General to the House of Commons 87 Opinion on financial statements 87 Opinion on regularity 87 Basis of opinions 88 Emphasis of matter – material uncertainty regarding property valuation 88 Conclusions relating to going concern 88 Responsibilities of the Accounting Officer for the financial statements 88 Auditor’s responsibilities for the audit of the financial statements 89 Other Information 90 Opinion on other matters 90 Matters on which I report by exception 90 Report 91

Financial Statements 94

Statement of Comprehensive Net Expenditure 94 Statement of Financial Position 95 Statement of Cash Flows 96 Statement of Changes in Taxpayers’ Equity 97 Notes to the Accounts 98 1. Accounting conventions 98 2. Statement of Net Expenditure by Operating Segment 108 3. Expenditure 112 4. Grants paid 113 5. Income 113 6. Property, plant and equipment 114 7. Heritage assets 118 8. Intangible assets 121 9. Capital and other commitments 122 10. Inventories 124 11. Cash and cash equivalents 124 12. Trade receivables, financial and other assets 125 13. Trade payables and other current liabilities 125 14. Provisions for liabilities and charges 126 15. Contingent liabilities 127 16. Related-party transactions 127 17. Events after the reporting period date 129

Annual Report of the Administration Estimate Audit and Risk Assurance Committee 132 Introduction 132 Conclusion for the financial year 2019-20 132 Appendix 136 Membership 138 Meetings 138 Internal Audit 139 Internal audits considered by the Committee 139 Risk Management 140 Internal audit charter 140 Planning of the audit programme 140 External Auditors 141 House of Lords Audit Committee 141 Members Estimate Audit Committee 141 Further information about the Committee 141 Performance Report | Annual Report and Accounts 2019-20 8 1. Performance Report

Overview 10 Joint foreword by the Clerk of the House and the Director General 10 Who we are 12 Our strategy 13 Our corporate culture 15 What we do 17 Finance summary 2019-20 18 Performance summary 2019-20 19 Performance Analysis 23 Facilitating effective scrutiny and debate 23 Involving and inspiring the public 24 Securing Parliament’s future 27 Creating a diverse and inclusive working environment 29 How we measure performance 31 Other corporate reporting 31

Performance Report | Annual Report and Accounts 2019-20 9 Performance Report Overview

Joint foreword by the Clerk of the of weeks which was an incredible achievement House and the Director General and deserving of the widespread praise it has received. Subsequent modifications to these The last year has had its challenges. Indeed, arrangements endorsed by the House have all as this Annual Report and Account goes to been speedily implemented. Making Parliament print, we find ourselves still tackling the very a COVID-19 secure workplace has also been a terrible impact that the COVID-19 pandemic has priority and we have worked closely every step had on the UK and throughout the world, and of the way with Public Health England to put in this will no doubt continue to be a prominent place measures that help to mitigate the risks of consideration in the year ahead. COVID-19. This will be an ongoing process for as long as the pandemic lasts, as the safety of all In response to the COVID-19 pandemic the those who work in Parliament is a key priority. House of Commons met virtually for the first time in its history, an unprecedented event This year there were also two prorogations and testament to the dedication and hard followed by a general election in December work of House staff. From early April 2020 2019. This election was the first election to be MPs were able to contribute and participate in held in December since 1923. Preparations for proceedings in the Chamber via video screens, the new Parliament were undertaken by many they were able to vote remotely through colleagues and we welcomed new and returning an electronic system and they were able to Members at the State Opening just before conduct Select Committee meetings and Christmas. This Parliament is being chaired by a evidence session through video conferencing new Speaker, Sir Lindsay Hoyle, who was elected technology. All of this was put together by our into the role on 4 November 2019. The current colleagues in the House Service in just a matter session of Parliament is due to run until 2021.

Performance Report | Annual Report and Accounts 2019-20 10 Following the report on Bullying and Harassment a Parliamentary Relationship Agreement which of House of Commons Staff by Dame Laura serves to set out the working relationship Cox that was published in October 2018, we between Parliament and the Sponsor Body. have continued to drive changes to the culture Other building and renovation works still and values that underpin our work. This year remain under the management of Parliament the Commons Executive Board agreed to four and these works have continued on the Estate, new values for the House Service: courageous, including the essential fire safety works and inclusive, trusted and collaborative. These were the renovation of Elizabeth Tower. championed within the organisation in our Everyone has a Voice campaign that seeks to As this report reflects there are still areas include and capture the views of all those who where we know more work can be done. The work in the House of Commons. Ensuring those Parliamentary Digital Service, whilst having been values are a lived reality is an ongoing challenge instrumental in much of the response to COVID-19 for everyone including the senior management has been reviewed this year and has set clear team. We are very pleased that all three of Dame targets to transform the way it operates over Laura Cox’s recommendations have now been the next two years. Information management, implemented. In December 2019 the Independent and the application of GDPR, has been improved Complaints and Grievance Scheme became an substantially at a central management level but independent bicameral team and in February needs further improvement at team level. And 2020 the House of Commons Commission agreed as has been evidenced in the publishing this year to establish a new Member Services team as of our Ethnicity Pay Gap, more work needs to be part of the House’s response to the report on the done to support and promote BAME colleagues bullying and harassment of MPs’ parliamentary into senior roles, a target the Commons Executive staff that was undertaken by Gemma White Board is committed to achieving. As part QC. We are pleased with the progress that has of our focus on Diversity and Inclusion, a been made to change the culture in the House of separate steering group, chaired by the Clerk Commons however we are not complacent about of the House, has been established to drive and the work that still remains to be done and it will implement the diversity and inclusion strategy. continue to be a priority for us going forward. In June 2020 an advisory group was established to specifically focus on issues relating to race in The Restoration and Renewal (R&R) programme the House service. This was as a direct response is the name given to the programme of works from senior management to the challenges that was set up to help restore and protect the highlighted by the BlackLivesMatter campaign. Palace and its historic legacy for the future. The R&R programme is the UK’s biggest heritage Finally, we would like to thank all our colleagues renovation project and to carry out this work in the House Service for their commitment and Parliament agreed that an expert body, called diligence to our work in the House of Commons, the Sponsor Body, should be established even when faced with the most extreme of independent of Parliament to undertake the challenges. work. On the 8 April 2020 the Restoration and Renewal Sponsor Body was legally established Dr John Benger and the R&R programme was officially handed Clerk of the House, House of Commons over to them. To prepare for this handover the Accounting Officers of the House of Commons, Ian Ailles House of Lords and the Sponsor Body signed Director General, House of Commons

Performance Report | Annual Report and Accounts 2019-20 11 Who we are The House of Commons Service provides procedural support and advice to Members The House of Commons is the democratically along with a wide range of essential services elected House of the UK Parliament. that facilitate the work of the House. The Clerk Its responsibilities include checking and is the Head of the House Service and the challenging Government, making laws, setting Director General chairs the Commons Executive taxes and debating the big issues of the day. Board. The governance structure is described in more detail on pages 41-45. The House of Commons Commission is responsible for the administration and More than 3,000 people work for the House services of the House of Commons, including Service, many of whom provide a shared service maintenance of the Palace and the rest of the to the House of Commons and the House of Parliamentary Estate. It ensures that the House Lords. All our staff are politically impartial and of Commons is a safe, secure and respectful take great pride in the work they deliver. workplace. The Commission is chaired by the Speaker and it includes Members, the Clerk of the House, the Director General and two external commissioners.

Performance Report | Annual Report and Accounts 2019-20 12 Our strategy

Mission we have technology, processes and services The mission of the House Service is to support a that are fit for purpose, and an environment that thriving parliamentary democracy. This is the is safe, clean and functional. core purpose of our organisation and the reason we work here. Everyone in the House Service has To fulfil our mission, we are focusing on four a part to play in helping to make this happen. specific goals:

Some of our teams are fulfilling this mission • Facilitating effective scrutiny and directly, by facilitating the work of the Chamber debate – We will provide expert and and committees or providing high-quality impartial procedural and specialist research and information services. Others are support for scrutiny and debate in the doing so indirectly, for example by ensuring that Chamber and to committees and Members

Performance Report | Annual Report and Accounts 2019-20 13 that is effective and is seen to be effective. Vision • Involving and inspiring the public – We The House Service strategy now includes a vision will open up Parliament to the public and for our organisation: ‘Everyone has a voice’. give them a voice in how to shape it. We This encapsulates our aspiration to be a fully will demonstrate its relevance to people’s inclusive workplace, where all employees are lives and promote its unique role and heard and respected. It also reminds us that the responsibility in our democracy. House of Commons is the democratically elected • Securing Parliament’s future – We will Chamber of the UK Parliament, where MPs address the challenges we face to our speak and act on behalf of their constituents. physical environment, safety and security, technology and finances to ensure that we are responsible with public money and sustain Parliament for future generations. • Creating a diverse and inclusive working environment – We will work together to create an inclusive environment that will promote a culture of respect and reflect the diverse society we represent.

Values In 2019 we updated the values of the House of Commons Service. We now have four values – Inclusive, Courageous, Trusted and Collaborative.

The values are owned collectively by everyone who works at the House of Commons. Their purpose is to:

• Guide our individual and collective behaviour • Describe the culture we want to build in the House Service • Help us to achieve our strategic goals • Support the Behaviour Code for Parliament

The values are not completely new. They build on the ‘behaviours’ that featured in our previous House Service strategy and on many positive examples of what is working well now. The values provide us all with an opportunity to think and talk about how we interact with each other and approach our work.

Performance Report | Annual Report and Accounts 2019-20 14 Our corporate culture

‘The determination to keep our parliamentary show on the road has been nothing short of incredible’ by Sir Lindsay Hoyle MP, Speaker of the House of Commons

The one phrase I hear regularly from MPs and From the moment Dame Laura Cox published staff is how proud they are to be in Parliament her shocking report into the extent of bullying – to work in such a prestigious and important and harassment in the House of Commons, institution. we vowed to carry out root and branch reform of the way we behave. At the town hall staff meetings I attend regularly, it is so clear to me how much love I am pleased to say that we have there is for this place – and how much talent already implemented all three of her we have within our ranks. recommendations: to scrap previous complaints systems and to introduce a new The fact that people are able to express their component of the Independent Complaints and views – good and bad – and to tell me about Grievance Scheme that allows investigations what they do, just shows how much the culture into historical allegations. The third – the has changed over the last 18 months. determination of complaints against Members without MP involvement – was voted through in June.

Performance Report | Annual Report and Accounts 2019-20 15 We have encouraged MPs, peers and staff – through the work they carried out on Brexit, to take part in our ‘Valuing Everyone’ training, last year’s snap General Election, and the to ensure everyone working on the estate lightning speed with which they developed is able to recognise and call out bullying, our semi-virtual proceedings and remote harassment and sexual misconduct. voting during the Coronavirus pandemic.

We have also improved our conduct within the The procedures in the Chamber, which have Commons itself. developed over 700 years, were changed almost overnight by the Broadcasting Team, Yes, there is always going to be heat in the Clerks, Parliamentary Digital Service and Chamber – but I try never to let it boil over. Maintenance Team working intensely together It can be rowdy and loud – but that doesn’t with external sound engineers. mean we can’t be respectful and treat each other with courtesy. The one thing that has struck me during these tumultuous last few months is how well we When we decided to transform the culture work together – even when thousands of our of Parliament, to make it kinder, gentler and colleagues have been forced to work remotely. better behaved, I knew we would have the The determination to keep our parliamentary backing of staff. show on the road no matter what, has been nothing short of incredible. After all, they are the mainstay of our village – our parliamentary community. They are the When I hold my next town hall with staff, people who make things happen – they make I look forward to thanking everyone for their this building work. Without them, we cannot endurance, innovation, and above all, for their manage. hard work. Whether this will be in person or via video conference remains to be seen. However, This has certainly been proved in recent times the message will be no less heartfelt.

Performance Report | Annual Report and Accounts 2019-20 16 What we do We work closely with the police to ensure the security of those on the Parliamentary Estate The House of Commons Service supports our by managing perimeter controls, searching democratic process in many ways by delivering and screening visitors, delivering a range dozens of activities every day to ensure that of internal security measures and providing the House of Commons can function effectively security support for Members working away and efficiently. from the estate.

Ensuring the smooth running of the We manage the delivery of everything from Chamber and committees mail and newspapers to food and IT equipment First and foremost, we need to ensure that into and across the 16 different buildings that the House of Commons Chamber, the debates make up the estate, and safely remove waste. in Westminster Hall and all committee meetings can function effectively. This means Information and communications having the right people in place to provide Our aim is to communicate proactively expert and impartial procedural advice for with all of our audiences in an open and Chairs and Members, and preparing and transparent way, to increase understanding publishing all the business papers before of the role, work, value and impact of the and after each sitting. House of Commons and its Members. The Communications Office develops our corporate Committee Office staff ensure that select communications strategy, sets the tone of committee members are well briefed and voice for our corporate communications supported in conducting evidence sessions and manages corporate media engagement. and producing reports. It also ensures that Members, their staff and House Service staff are kept well-informed at Live feeds of Chamber and committee all times. proceedings are produced for TV and online broadcasting, and an authoritative official The House of Commons Library provides a wide record is compiled in Hansard. range of research briefings to all Members, on legislation, debates and other topical issues. Providing the facilities we all need These are also published on our website, to work allowing the wider public to share our expertise Behind the scenes, we need to ensure that and knowledge. The House of Commons Library Members, their staff and House Service also responds to research enquiries from employees have the right accommodation individual Members and their staff. and equipment to do their jobs: clean, safe, secure offices and meeting rooms, a secure The Committee Office has a dedicated and resilient network infrastructure, and the team of media and digital communications technology and systems we all need to support specialists that support all select committees our work. in promoting their activity, generating media coverage and driving engagement in their We provide catering services across several inquiries. venues in different buildings, from early in the morning until late at night. We have a UK Parliament website and a broad range of social media accounts that allow

Performance Report | Annual Report and Accounts 2019-20 17 the House to communicate with the public Finance summary 2019-20 about the many different activities taking place here. The table below summarises our resource and capital expenditure for 2019-20. Education and engagement Involving and inspiring the public is a key part Estimate Outturn Variance of the House Service strategy. We strive to £ million £ million £ million provide a warm welcome to everyone who visits

Parliament, whether for democratic access Gross resource 459.3 431.6 tours that are available to UK residents (hosted expenditure by a Member of either House), official business, Income (18.8) (18.6) educational visits or paid-for tours. In total, Net resource over a million people visit Parliament each year. 440.5 413.0 27.5 expenditure

Beyond Westminster, we run outreach and Gross capital engagement events across the country for expenditure 348.5 401.6 children, for community groups and for Income – (107.4) university students, to explain how Parliament works and how they can get involved. We Net capital 348.5 294.2 54.3 provide opportunities for the public to expenditure participate in parliamentary business, including through e-petitions, interaction For both resource and capital expenditure, on social media and submissions to select the main driver for the underspends shown committees. above is the slower than expected delivery on some property projects. This includes the Managing resources Restoration and Renewal Programme (resource We need to manage our resources wisely: and capital) and the Mechanical, Electrical our people, our money and our estate. We and Building Fabric project, and Fire Safety understand the importance of attracting and Improvement Work (capital). The capital retaining talented staff, to enable the House to income of £107.4 million reflects the House of operate effectively and efficiently at all times. Commons acquiring the freehold to Richmond We have robust processes in place to ensure House from the Department of Health during efficient planning and monitoring of expenditure, 2019-20. More information about this is timely payment of employees and suppliers and contained in the Statement of Parliamentary effective management of our income. Supply Commentary on pages 78-84. The Palace of Westminster is a Grade 1 listed building and a UNESCO world heritage site. This, and the other buildings that make up the Parliamentary Estate, need to be maintained on a daily basis to ensure they remain a safe and functional place for all. At the same time, we are also planning and undertaking major refurbishments and upgrades of the fabric and infrastructure of the estate.

Performance Report | Annual Report and Accounts 2019-20 18 Performance summary 2019-20 process. Due to the unpredictable nature of the House’s Brexit-focused business this 2019-20 was characterised by significant had a major impact on our working patterns changes and the ability of the House to with staff responding at short notice and respond and adapt throughout the year. While providing support through extended hours. some changes were expected and part of The uncertainty also impacted on long-term plans, others were in response to the planning and delivery of Estates more recent events or were not anticipated, programmes, with work being stood down including the General Election and rapidly at short notice. Key deliverables include the adapting to the COVID-19 pandemic at the end first Saturday sitting for nearly 40 years, of the year. and during October 2019 ParliamentLive.tv had a record month with 8.9 million views. Rising to the requirements of Brexit – (41.6 million views in the 11 months leading Brexit dominated the political and procedural up to the end of February.) The Parliamentary landscape. Throughout the last year, our Security Department managed constant staff have provided expert procedural advice, protests on our doorstep relating to Brexit research, communications and a wide range and a range of other issues and the Members’ of other support services around the Brexit Security Support Service worked tirelessly

Performance Report | Annual Report and Accounts 2019-20 19 to support Members and their staff in • Using the election as an opportunity to dealing with the increased level of physical increase public engagement. and online threats. • Undertaking over 400 office moves, all of which occurred within five days of General Election – The unplanned 2019 the whips allocating an office to each General Election required a significant Member. This includes the time taken response from the House of Commons and for Members to pack and the Christmas Digital Service with over 50% of the workforce period. taking on additional responsibilities to their normal roles, in order to support it. Planning Responding to the Cox, Stanley and to support an election was stepped up in White Reports – All three of the key early 2019 given the political uncertainty and recommendations made by Dame Laura continued through the year until an early Cox in her report into the bullying and election was agreed by the House. Once harassment of House of Commons staff have agreed, every team in the House was critical been implemented. The ‘Valuing Others’ and to successful delivery with key areas of work ‘Respect’ policies have been permanently including: suspended. The Independent Complaints and Grievance Scheme (ICGS) and helplines have • Training 250 staff in a range of areas to been opened to non-recent cases and cases support newly-elected Members, those of former employees. Proposals to ensure that who chose not to stand, and those who complaints of bullying, harassment or sexual weren’t returned at the election. harassment brought against Members of • Contacting every newly-elected Member Parliament will be handled through an entirely within 48 hours of the election, which independent process were developed during included arranging any necessary travel the year and consulted on, before being agreed and accommodation. by the Commission in April. We took forward • Tailored induction programme for new work to implement the recommendations of Members, which included procedural Alison Stanley’s review of the ICGS, including briefings, rules and courtesies of establishing an independent bicameral ICGS the House, security advice for both team in December 2019. A new Member Westminster and constituency work, Services team was established as part of the pensions, and registering financial House’s response to Gemma White QC’s report interests. 92% of new Members also into the bullying and harassment of Members’ attended the ‘Valuing Everyone’ course. staff. We have also encouraged MPs (including A range of written handbooks and guides newly elected Members), peers and staff to were also updated. Feedback on the take part in our ‘Valuing Everyone’ training, election services provided by the House to ensure everyone working on the estate from new and former Members has been is able to recognise and call out bullying, positive, including 96% of new Members harassment and sexual misconduct. In June rating the preparations made by the 2020 the House agreed to the establishment House as excellent. of an Independent Expert Panel to determine • Supporting the setup and closure of complaints against Members of bullying or Members’ offices, including specialist harassment under the ICGS. HR advice, collection and delivery of IT equipment over a five-month period.

Performance Report | Annual Report and Accounts 2019-20 20 Transforming our corporate culture – The response to the COVID-19 pandemic in terms House Service Strategy has been updated to of enabling greater remote working. We include a new vision, four new values (following also commissioned an independent review extensive engagement with staff through (Stance report) which laid the foundations workshops) and a new objective to create a for a ‘Transforming Digital’ programme to be diverse and inclusive working environment. implemented this year. These new elements all support culture change in the House of Commons Service. During the Environmental sustainability – In February year, we appointed an independent Culture Parliament’s catering teams were awarded the Change Director to help us to drive this work highest mark in the Sustainable Restaurant forward and this is now being sustained by an Association’s ‘Food Made Good’ scheme. The in-house SCS lead. scoring covers a range of factors including ethical sourcing of ingredients, waste Estates programmes and projects – Over reduction, and environmental considerations. the past year we have made progress with More generally, our recycling performance renovations across the Parliamentary Estate. improved significantly during the year and is Major milestones included the completion of now at its highest-ever level, with 69.5% of Canon Row main works (after five years) and waste recycled compared to 60% a year ago. Westminster Hall conservation and safety works (after ten years), as well as further Business as usual – Alongside the significant progress on repairing cast-iron roofs on the events and achievements highlighted above, Palace of Westminster and refurbishment on it is worth noting that much of the day Elizabeth Tower (albeit at increased cost). to day work of the House Service may go The refurbishment of Derby Gate is well under unnoticed due to absence of visible ‘events’. way and planning and survey work for other Throughout the year, as part of day to day parts of the Northern Estate Programme (NEP) delivery, Parliament was kept safe and secure continues. During the year we established the physically as well as virtually. Nearly 40,000 Moves Programme as a critical enabler for NEP reactive maintenance and porterage cases and Restoration & Renewal – the buildings to were completed, there were no successful be emptied are occupied by over 2.000 House cyber attacks against the Parliamentary staff, 100 Members and their staff, and a raft Network (although attempted attacks are a of essential services and strategic assets, daily occurrence) and there were no delays to including broadcasting, printing, security and proceedings in the Chamber or committees due digital services. to delays in producing business papers.

Digital Service – During the year we made significant investments to tackle the historical technical debt in Parliament and modernise our infrastructure. This included retiring the last parts of the 1980s telephony system and replacing with Skype for Business (enabling secure conferencing and collaboration), rolling out Office 365 and upgrading to the Windows 10 operating system. These improvements laid the foundations for the subsequent

Performance Report | Annual Report and Accounts 2019-20 21 Performance Report | Annual Report and Accounts 2019-20 22 Performance Report Performance Analysis

Facilitating effective staff. Much of the Library’s research output is now scrutiny and debate published on their dedicated website1 so that it can be shared with the wider public. Parliamentary activity in 2019-20 was dominated by the Brexit debate: in the scrutiny of For the first time in nearly forty years the House negotiations between the UK Government and of Commons sat on a Saturday (19 October 2019) the European Union; in passing the legislation in order to consider the Prime Minister’s proposed necessary to prepare for the UK’s departure, exit package. All the necessary support services, and in considering a large volume of associated from the preparation of business papers, secondary legislation. During this time there was procedural advice and broadcasting through an increased focus on parliamentary procedure to security and catering were quickly organised as Members sought either to support or challenge to facilitate this day’s proceedings. proposals, and a small Government majority until the December 2019 General Election meaning Of course, Brexit was not the only legislation that votes were closely contested. considered by the House during 2019-20. We also supported Members by providing briefing material We provided procedural advice and support on subjects including rates for non-domestic to Members to help them scrutinise the properties, preparations for the 2021 Census of Government’s proposals for the United Kingdom Population and the use of wild animals in circuses. to leave the European Union and the associated legislation to bring this into effect. This included During the year the Commons Library launched advising individual Members who wished to table a range of new Library services for Members and amendments to legislation and supporting select their staff. committee chairs in planning and organising Brexit-related inquiries. • An online ‘first port of call’ is available to guide users to the most appropriate Our expert researchers in the House of Commons form of support for their particular Library provided an extensive range of research enquiry. In many cases we have pre- and analysis on Brexit-related issues, including prepared briefings available online, but comprehensive briefings on legislation, shorter sometimes a tailored response is the most ‘insight’ articles on a range of topics and regular appropriate way to deal with an enquiry. email bulletins guides – as well as responding • Remote access to Library resources has to individual enquiries from Members and their been improved, making it easier for

1 https://commonslibrary.parliament.uk/

Performance Report | Annual Report and Accounts 2019-20 23 Members’ constituency staff to access our in Parliament to the wider public. Our aim resources. was to demystify parliamentary procedures • Our research briefings are now web- around Brexit and provide impartial, accessible friendly, device-responsive and we have expertise to everyone. This work focused around improved website search and navigation the following objectives: to make them easy to find. • To provide timely, responsive There have been delays in delivering a communications to journalists, facilitating programme of training and support for accurate and impartial reporting. Members’ staff – partly due to the General • To distil complicated procedural Election – but online training is now being knowledge into plain English, fostering developed instead. improved understanding beyond the expert community. We have also introduced changes so that • To engage a broader audience, beyond we can support select committees more the Westminster lobby or the politically effectively. Following recommendations in the engaged. Liaison Committee’s report The effectiveness • To address negative misconceptions of and influence of the select committee system2 the House of Commons by separating we have invested an additional £1.5 million in procedure from the politics of Brexit, and staff and other services within the Committee defining our role. Office and the Library. We have also upgraded • To signpost available resources such as the systems used to manage the workflow of ParliamentLive.tv and Commons Library committee inquiries. briefings to the public and media.

We had intended to launch a new Legislation We built our approach around reaching the Application in 2019-20 in order to improve disengaged audiences highlighted in our the efficiency of publishing bills and their research – particularly women and young corresponding documents on the Parliament people – who primarily get political information website. Instead, we gave priority to other from traditional news outlets. We put our media website improvements. This, in turn, means that relations work centre stage, supported this with the Legislation and Drafting Application (a joint targeted social media activity, and looked for initiative with the Scottish Parliament) is also creative ways to expand our offering and serve now delayed. Work on both of these projects is new audiences. continuing and further improvements will now take place during 2020-21. For key Brexit-related votes we expanded the privileged access normally limited to journalists with accredited access to Involving and inspiring the public Parliament (‘Lobby journalists’) to welcome outlets representing regional and international Our support in relation to Brexit wasn’t media organisations. We set up a series of restricted to helping Members and select temporary media centres, facilitated access committees but in communicating events to the Chamber and provided procedural

2 https://publications.parliament.uk/pa/cm201719/cmselect/cmliaisn/1860/1860.pdf

Performance Report | Annual Report and Accounts 2019-20 24 ‘explainer briefings’ with Clerks. Images from number of people we have engaged with (our our in-house photographers were published in reach) over the last year. national, international and regional media. We had intended that our paid-for tours would We know that our efforts paid off: generate income of £2.4 million in 2019-20. In the event we achieved £2.1 million. This was • Our briefings and insight service partly due to a slowdown in visitor numbers subscribers grew six-fold during 2019. – and then complete closure – during March, • Our assets became teaching materials. because of the COVID-19 outbreak. However, it Lecturers from University College London was also affected by changes in the mix between and Edinburgh University referenced us as different types of tours. The take-up of audio the ‘go-to’ source for fact-checking. tours was higher than anticipated while guided • Our photographic images were used on tours were less popular. Nevertheless, this was thirty front-pages, including The Times an improvement on 2018-19 when we generated and the BBC website. £1.9 million of income from paid-for tours. • New outlets, such as Newsround and BBC Radio 1’s Newsbeat recorded in Parliament In 2019-20 we introduced new follow-up questions for the first time, reaching previously for the people we engaged with through this work unserved audiences. to measure their satisfaction and the impact of our work. The results are as follows: Our Participation team provide a range of services at Westminster and across the country • Overall, 93% of people rated the quality that enable different groups of people to engage of their engagement with the Participation with Parliament. The table below shows the team as good or excellent (target 90%).

Category 2019-20 actual Target Performance 2018-19 Visitors to Westminster: Paid-for tours 199,600 200,000 Narrowly missed 179,390 Democratic access tours: 44,001 50,000 Missed 45,755 school-age children Democratic access tours: 18,478 25,000 Missed 19,459 adults Education Centre 70,238 70,000 Achieved 67,245 Reach beyond Westminster: Outreach: school-age children 134,323 100,000 Exceeded 123,239 Outreach: community events 21,450 22,000 Narrowly missed 21,485 People engaging with our 293,374 182,000 Exceeded 213,722 resources

Performance Report | Annual Report and Accounts 2019-20 25 • 94% of respondents said that their including the Muslim Council of Britain and knowledge and understanding of the Hindu Council UK to the Association for Parliament had improved as a result of Citizenship Teaching and Just Like Us (Schools their engagement (target 80%). Diversity Week). The table below shows how • 92% of respondents said that they knew the UK Parliament Week campaign has grown how they could contribute to Parliament’s in recent years. work (target 80%). • 73% of respondents said that they felt Each year we monitor a range of success they had influenced Parliament’s work, measures in relation to UK Parliament Week for example, by signing a petition or activities. Some of the key figures from this contacting their Member on a particular analysis include: issue (target 70%). • Schools’ participation rose from 9% of UK Parliament Week 2019 all UK schools in 2018 to 16% in 2019. In November 2019 we held UK Parliament Week This is very much a reflection of the new 2019, our flagship campaign for promoting partnerships agreed with educational awareness of, and engagement with, UK organisations in the past year. Parliament. The campaign has a particular • There was a 35% increase in participation focus on reaching out to school-age children across Wales. In part, this reflects the and young adults. The General Election meant fact that almost all resources are fully that the UK Parliament dissolved in the middle bilingual. of Parliament Week. This affected events, • Media monitoring (excluding broadcast considerably limiting Member involvement media) indicates that 12% of all adults compared with 2018. It also meant that the UK (7.9 million people) were reached by UK Youth Parliament was unable to take place and Parliament Week coverage. planned media activity had to be cancelled. This • 96% of coverage was favourable in tone, reduced media and social media coverage. and 40% strongly so. • Social media engagement was lower this A range of different organisations each ran year due to the dissolution of Parliament activities exploring what Parliament means and the fact that there was less Member to them and their community. Relationships engagement and fewer opportunities to with official partner organisations increase our generate or amplify content. reach by giving us access to their networks, achieving a multiplier effect. In 2019 there were In 2019-20 we made wide-ranging changes 46 official partner organisations, ranging from to the Parliament website. Behind the scenes uniformed youth groups such as Girlguiding we have clarified the technical direction, UK and the Scouts Association to faith groups restructured our software engineering function

2016 2017 2018 2019

Activities held 311 4,569 8,108 11,839

Participants reached 25,743 360,000 989,400 1,225,324

Constituencies covered 166 650 650 650

Performance Report | Annual Report and Accounts 2019-20 26 and strengthened governance arrangements. Securing Parliament’s future This has resulted in a significant increase in the pace of delivery. Across the site, we are rolling Estates work out improvements to look and feel, with pages During 2019-20 a significant amount of that are mobile responsive and meet public work was undertaken to the fabric of the sector accessibility standards. As well as a new Parliamentary Estate, and also in preparing website homepage and Committee pages, we for the Restoration and Renewal (R&R) of the have produced an online version of Erskine May Palace of Westminster. Information about and brand-new Members’ web pages including the costs of some of the major capital works portraits. Alongside this, we’ve released Votes in projects and programmes is provided in the Parliament3, which provides the voting records narrative on the Statement of Parliamentary for individual Members. This means for the first Supply (pages 78-84). A broader assessment time, users can find all votes that take place about the governance of major Estates in both Houses of Parliament in one place. The projects and programmes, including safety next phase of changes during 2020 will see the management, is provided in the Accountability rollout of the new mobile-responsive look and Report on pages 59-61. feel across the site. Preparations for Restoration and Renewal There have been some areas where the pace of the Palace of Westminster of change was not as quick as we would have On 1 April 2019 accountability for both the wished. We had intended to roll out our tours sponsor functions and initial operating capability booking system to Members’ constituency was formally transferred from the House Service offices, making it easier for constituents to book to the Shadow Sponsor Body. The Parliamentary visits to Parliament. Unfortunately we faced Buildings (Restoration and Renewal) Bill received unexpected challenges with delivery, and the Royal Assent in October 2019. This paved the requirements were reviewed, which led to plans way for the Sponsor Body to be established in being de-prioritised. substantive form on 8 April and for the Delivery Authority to be incorporated. This means that the The transition from standard definition to high House of Commons has now handed over formal definition broadcast coverage of the Chamber responsibility for delivering the R&R Programme and committees has not been completed. This is to an independent entity. More details of the dependent on relocating broadcasting equipment work undertaken to establish the Sponsor Body to a new suite in the Canon Row building. As and Delivery Authority is contained on page 50. refurbishment of this accommodation took longer Details of senior appointments to the Sponsor than planned there has been a knock-on delay Body and Delivery Authority are outlined on to the broadcasting upgrade. However, trials pages 50-51. Stage one in the Royal Institute of to use new automated cameras in committee British Architects (RIBA) plan of work4 for R&R rooms have been successful, and the take-up of has been completed. broadcast coverage in committees has almost doubled since 2016.

3 https://votes.parliament.uk/

4 The RIBA plan of work provides a framework for planning and delivering construction and refurbishment projects. Stage one refers to the initial preparation and brief.

Performance Report | Annual Report and Accounts 2019-20 27 Northern Estate Programme event, the Commission’s 2018 decision – that the The Northern Estate Programme involves significant cost, potential delay and exposure the refurbishment and redevelopment of five to unforeseen risk were too high and thus not a listed buildings: Norman Shaw North, Norman prudent use of tax payer money – was upheld. Shaw South, 1 Parliament Street, 1 Derby Gate, and Richmond House. Works to Derby Gate Moves Programme are already well under way and are scheduled We established our Moves Programme in to be completed in Winter 2020-21. The March 2019 to underpin the Northern Estate intention is that once Derby Gate is Programme, and the Restoration and Renewal completed, Members with offices in Norman of the Palace of Westminster. The intention is Shaw North will relocate there, allowing for it to plan, coordinate and deliver all the work to progress to the next building. changes to the shape of the parliamentary Estate through acquiring, designing and fitting In October 2019 the House of Commons out new parliamentary buildings, adapting submitted a planning application to the Palace temporarily, and then organising Westminster City Council for the Northern thousands of office moves for Members, their Estate Programme. staff and House staff. To deliver the programme successfully we will need to engage with those Elizabeth Tower concerned and ensure that we create flexible, In 2019-20 work to conserve and refurbish inclusive and accessible workspaces in line Elizabeth Tower (which houses the bell ‘Big with our new workspace principles that have Ben’) continued. The current work is the largest been agreed by the Commons Executive Board and most extensive maintenance project in the and the Commission. tower’s 160-year history. To ensure the UK’s most famous clock continues to keep time and the Details of other major Estates programmes tower is safeguarded for future generations, are outlined in the Statement of Parliamentary specialist teams have been engaged in a wide Supply Commentary on pages 78-84. range of work. This has included repairing the clock mechanism and all four sets of clock Digital hands, recasting of the cast iron roof tiles, During the year we made significant investments cleaning and repairing of the ornate stonework to tackle the historical technical debt in and upgrading the interior work and tourist Parliament and modernise our infrastructure. exhibition spaces. The project is also installing a We retired the last parts of the 1980s telephony lift within the tower to provide a better means of system and replaced it with Skype for Business, emergency evacuation and to improve access to rolled out Microsoft Office 365 to all network maintenance and a wider range of visitors. users and upgraded to the Windows 10 operating system. These changes have enabled Significant forward planning allowed the bells secure conferencing and collaboration. This of Elizabeth Tower to chime to commemorate work laid the foundations for the subsequent Remembrance Sunday and to mark the beginning response to the COVID-19 pandemic in terms of of the New Year with minimal disruption to the enabling greater remote working – especially work. There was considerable interest for the the rapid deployment of Microsoft Teams. bells within Elizabeth Tower to chime again to mark the United Kingdom’s exit from the In 2019 we commissioned an external review to European Union on 31 January 2020. In the look at website governance and related issues.

Performance Report | Annual Report and Accounts 2019-20 28 The Stance Review, published in November 2019, away from the Parliamentary Estate. To provide made reference to the need for Parliament to better support for Members’ constituency-based clarify and update its digital operating model staff we have also delivered 11 regional security so as to meet the ambitions of both Houses. briefings in different parts of the UK. Round table discussions were held with staff and members of the Digital Strategy Board early in 2020 and the responses to the Review Creating a diverse and inclusive are now being taken forwards through the working environment emerging Transforming Digital programme. This programme will have implications not just Despite having various policies and measures in for the way the Parliamentary Digital Service place to safeguard employees against bullying, operates but for Parliament more generally. harassment and other unacceptable behaviours, Parliament found itself in the media spotlight In July 2019 we completed the Commons in early 2018 after former House of Commons Members’ hardware refresh project. This employees spoke out with accusations of bullying. upgraded all the hardware loaned to Members The House of Commons Commission appointed elected in 2015 and returned at the 2017 Dame Laura Cox to deliver an independent General Election with Windows 10, which is inquiry into the bullying and harassment of faster and more secure. This covered almost House of Commons staff. Dame Laura’s findings 550 Members, covering both their Westminster and recommendations were welcomed by the and constituency office equipment. Some House of Commons Commission, which acted improvements have been made to Wi-Fi on promptly to take remedial action. Even before the Estate with a focus on improving coverage the Cox Report was published in October 2018, in Portcullis House and the Northern Estate a new Behaviour Code for Parliament had been buildings (although it must be noted that Wi- launched, setting out clear guidance for everyone Fi and mobile telephone reception generally is at Parliament. Between the publication of the impacted by the large amount of scaffolding Cox Report and the end of 2019, the House of present in some areas of the Estate). These Commons implemented an extensive range of changes have made collaboration between staff measures and support to help eradicate bullying in different Westminster buildings easier, and and harassment. improved connectivity between Westminster and Members’ constituency offices. In January 2019, Julie Harding was appointed as Independent Director of Cultural Transformation Security for a twelve-month term. She joined us Our Members’ Security Support Service (MSSS) with substantial experience in delivering provides advice and support to Members of both operational and cultural change programmes Houses and their staff regarding their security at organisations including HSBC and the Co- and safety when away from the Parliamentary operative Bank. Julie worked with a small Estate. During the year we have increased the team to develop a detailed culture change number of Commons Members signed up to the programme, translating the recommendations social media monitoring service and increased from the Cox Report into tangible, measurable the number of abusive items removed from and lasting change. The team: social media platforms. We have also started to implement additional security measures, • Consulted with over 800 House Service including CCTV, for Members and their staff colleagues to identify what needed to

Performance Report | Annual Report and Accounts 2019-20 29 change and develop a set of values October 2019 saw the second of Dame Laura to guide our behaviour, decisions Cox’s recommendations implemented when and actions. The values can be seen the Independent Complaints and Grievances on page 14. Scheme and helplines were opened to non- • Developed an approach that would allow recent cases and cases of former employees. the values to be embedded across the The House approved plans to implement the organisation over a three-year period. final recommendation, that the investigation • Created, as a key part of this approach, of complaints against Members should be a network of 35 trained ‘Voice an entirely independent process, in June Champions’ (volunteers from across the 2020. More information about progress in organisation), to exemplify the values implementing the recommendations is outlined through their own behaviour. in the Accountability Report on page 61. • Supported the members of the Commons Executive Board and other senior leaders After the publication of the Cox Report the to role model the values and address Commons Executive Board set in motion an audit behavioural issues within their teams. of the rules and practices governing access to services and facilities around the Parliamentary On pages 15-16 Mr Speaker outlined his support Estate. Dame Laura had specifically identified for the changes in the culture that we are these as contributing towards an unhealthy ‘us seeking to achieve. Our action plan to embed and them’ culture, a view echoed by colleagues and monitor cultural change, which started in in focus groups run by Julie Harding. In May 2019-20, will extend into 2020-21. 2019, high-level proposals were developed for access in the House of Commons, with the aim Since it was launched in March 2019, over of getting rid of any restrictions linked to status 3,700 people have participated in our ‘Valuing or grade, in favour of new rules giving access to Everyone’ training. (This is comprised of spaces on the basis of business need. Everyone over 2,500 House staff (85%), 352 Commons working at the House of Commons was invited Members and 218 Members’ staff.) ‘Valuing to share their views through a consultation Everyone’ is a three-hour course aimed at exercise. Feedback from this consultation was Members of both Houses, Members’ staff and used to finalise a package of reforms presented staff of both Houses and the Digital Service. to the House of Commons Commission and The course explains the responsibility that subsequently approved. The inclusive new everyone has in creating a safe and positive access rules were implemented from 1 January working environment and builds awareness of 2020, initially for a one-year period. The the impact of bullying, harassment and sexual majority of changes have had minimal or zero misconduct. It explains the protections and impact on Members, while creating a more expectations embodied in the Behaviour Code welcoming and less hierarchical environment for Parliament5 and familiarises attendees for those who work in Parliament. with the reporting mechanisms and sources of support available. In January 2020 we launched a major three- year communications campaign to accelerate

5 https://www.parliament.uk/mps-lords-and-offices/standards-and-financial-interests/parliaments- behaviour-code/

Performance Report | Annual Report and Accounts 2019-20 30 cultural transformation, ‘Everyone Has A Voice’. metrics. These include performance targets This is based on the central new vision from the for a range of services such as the Digital Strategy for the House Service (see page 14) and Service Desk, cleaning and maintenance, and is a bold statement of the future direction for our the Library, as well as key finance and human organisation. It is intended to help all colleagues resources measures. Each quarter the CEB to embrace and embody our values, and to reviews delivery of the actions set out in the showcase evidence that culture change is really corporate business plan for the House Service. happening. The activities included the following: These quarterly reviews are shared with the House of Commons Commission. • 11 interactive launch events held across four different buildings on the Having refreshed the strategy for the House Parliamentary Estate. Service in September 2019 work started • A special edition of ‘Your House Service’ to develop a new set of strategic metrics (our staff newsletter) was published. to measure progress in delivering against • A dedicated ‘Culture Hub’ is now available the strategy. That work took longer than on our intranet, bringing together a range anticipated and was then paused when the of tailored resources. COVID-19 pandemic began. This work is now • An all-staff culture survey has been under way once more, and new metrics will undertaken. progressively come on stream during 2020-21.

In 2018 the Old Vic Theatre in London created Portfolio reporting a new workplace behaviour initiative called A significant part of achieving our strategic goals the ‘Guardians’ programme. This innovative relies upon the successful delivery of various scheme gives staff a way to share their concerns projects and programmes across the House about behaviours they have witnessed or Service. The current parliamentary portfolio experienced with someone outside of their comprises 16 programmes and 140 projects regular management reporting line. Guardians (of which 12 are major, standalone projects). are trained volunteers who listen, support and offer confidential advice to colleagues about Our Enterprise Portfolio Management Office the various escalation channels available to (EPMO) maintains oversight of all project and them. Over 50 other organisations from different programme activity across both Houses of sectors have since adopted the principles of Parliament and the Digital Service. It reports this programme and become part of a broader on project and programme activity – overall Guardians Network managed by the Old Vic delivery confidence, time, cost, benefits, Theatre. In February 2020, Parliament joined the resources, risk and dependency – to the Boards Guardians Network, launching its own programme of both Houses (and the Joint Investment Board) based the principles developed by the Old Vic. to monitor progress and help ensure that the change the organisation wants is delivered. How we measure performance Other corporate reporting Performance framework The Commons Executive Board (CEB) monitors Health and safety performance on a monthly basis using a We place great importance on protecting the dashboard of operational KPIs and other health and safety of all those who visit or work

Performance Report | Annual Report and Accounts 2019-20 31 in our premises. The Parliamentary Estate publish selected responses, particularly if they has a wide and complex safety risk portfolio. are topical or where there is interest from more In addition to being the place of work for than one requester. Members of both Houses, their staff, and staff of both Houses, Parliament is a major tourist We also publish all responses that contain attraction. There are significant demands on datasets, in accordance with our obligations accommodation and an extensive programme under Section 11 of the Freedom of Information of construction and maintenance activities. All Act 2000. We also publish all responses of these activities are co-located in a relatively that contain datasets on our disclosure, compact location and potential safety risks in accordance with our obligations under need to be carefully managed. Section 11 of the FOI Act. The FOI page on the Parliament website contains information In 2019-20, 247 incidents and near misses about our publication scheme, how to make (narrowly-avoided accidents where no injury an FOI request, our disclosure log and our or damage occurred) were reported to the transparency publications.7 Parliamentary Safety team. The corresponding figure in 2018-19 was 246. Five of these required The House of Commons actively encourages reporting to the Health and Safety Executive the reporting of all information incidents, under the Reporting of Injuries, Diseases and including low level or localised incidents. We Dangerous Occurrences Regulations (2018-19: continually seek to manage the risks to all our five).6 The Parliamentary Safety team works information, ensuring that any weaknesses are closely with Maintenance Services to ensure identified, and improvements made to avoid that where near misses have been caused by a re-occurrence. In 2019-20, there were no premises faults, repairs are made promptly. incidents judged to be notifiable in line with our Strategic Estates investigate cases related to obligations under the General Data Protection the building fabric. Safety management and Regulation (GDPR) and therefore no reports compliance are discussed on pages 60-61. were made to the Information Commissioner’s Office (ICO). Data requests and incidents In 2019-20 the House of Commons processed The Governance Statement on page 61 considers 684 requests for information which were the internal audit review of how we implemented handled under either the Freedom of the GDPR. Information (FOI) Act or the Environmental Information Regulations – an increase of 23% Supplier payment performance on 2018-19. We met the statutory response In 2019-20 95% of supplier invoices were deadlines in 98% of these cases. Where some paid within 30 days of receipt, compared or all of the information is disclosed, we to 87% in 2018-19. The volume of invoices

6 The figures for safety incidents shown here are calculated from internal reports for the first three quarters of 2019-20, and from monthly reports for the last quarter of the financial year. On this occasion they have not been subject to additional year-end validation because the Parliamentary Safety team has been heavily involved in responding to COVID-19.

7 https://www.parliament.uk/site-information/foi/foi-and-eir/commons-foi-eir-information/

Performance Report | Annual Report and Accounts 2019-20 32 received, at just over 45,000, was almost carbon impact are minimised. The coming identical in both years. In late March the year will also see closer working between the Finance team developed new processes using Environmental Sustainability team and the electronic signatures so that payments could Procurement and Commercial Service to make be processed and approved by staff working further progress in meeting the goals of their remotely. (Prior to this hard copy signatures environmentally sustainable policy statement. were required on all payment approvals.) Greenhouse gas emissions in 2019-20 Climate change, sustainability and the The main source of Parliament’s carbon environment dioxide emissions is from the consumption Introduction of gas and electricity across the Estate. This section follows – as far as possible and to Parliament procures its electricity from the extent it is appropriate – the template and 100% renewable sources. The energy that we guidance issued to Government departments consume is converted into tonnes of carbon in HM Treasury’s Financial Reporting Manual. dioxide equivalent using the 2019 conversion All the data (including expenditure) relate to factors provided by the Department for the Parliament as a whole. Environment, Food and Rural Affairs for April to December 2019, then the 2020 conversion Below, we report on trends in our greenhouse factors for January to March 2020. gas emissions; waste and recycling, and water consumption. In 2010 we set long-term targets Parliament’s long-term target is to reduce for the reduction of greenhouse gas emissions, absolute carbon dioxide emissions resulting water consumption and the amount of waste from energy use by 34% between the 2008- we produce, and to increase the rate of waste 09 baseline and March 2021. In order to recycling. In each case the baseline year was be on track to meet this long-term target, 2008-09 while the final target year is 2020- emissions should have fallen by 31.3% by the 21. Intermediate targets were calculated on a end of 2019-20. In fact, we have now achieved straight-line basis. Targets have occasionally a 40.3% reduction relative to the baseline, been recalibrated when the size of the exceeding both the target for this year and Parliamentary Estate has changed, for example the long-term target. when we have acquired a new building. The 2020-21 financial year is the final year for our Recent activity to improve energy efficiency current long-term targets. These are currently All projects and programmes are required under review, and new targets will be agreed to identify environmental impacts to ready for the 2021-22 financial year. identify potential carbon savings. The Environmental Sustainability team act as Sustainable procurement a key stakeholder and provide technical Sustainability considerations are increasingly and legal advice on major refurbishments being incorporated into our procurement through their representation on a wide range activity. For example, the House of Commons of boards and working groups, including Vote Office is focusing on minimising packaging Restoration & Renewal, the Northern Estate waste, while the Digital Service is ensuring Programme and the Estate Wide Engineering that – as far is is practicable –power efficiency Infrastructure and Resilience Programme. is maximised, while electronic and electrical Parliament is committed to achieving BREEAM waste considerations and the associated ‘Excellent’ ratings for new builds and major

Performance Report | Annual Report and Accounts 2019-20 33 Greenhouse gas emissions

2016-17 2017-18 2018-19 2019-20

Total Gross Emissions for Scopes 1 & 2. 17,550 16,343 13,176 13,104 Non- Financial Total Net Emissions for Scopes 1 & 2. 10,760 16,343 13,176 5,491 Indicators (i.e. fewer green tariffs) (tCO2e) Gross emissions Scope 3 business travel 1,952 1,434 1,908 1,141

Related Electricity: Non-Renewable 27.2 28.32 26.68 0.86 Energy Electricity: Renewable 0.93 0 0.01 28.08 Consumption (million kWh) Gas 29.21 29.94 27.26 28.60

Expenditure on Energy 3,996 4,020 5,124 3,946 Financial Indicators Expenditure on accredited offsets 0 0 0 0 (£’000s) Expenditure on official business travel 5,398 4,734 5,074 3,157

Glossary The following scopes of carbon dioxide (CO2) emissions are defined in HM Treasury’s Financial Reporting Manual: Scope 1: Direct emissions of greenhouse gases Scope 2: Energy indirect emissions Scope 3: Emissions as a result of official business travel. This includes the travel of Members and officials of both Houses on parliamentary business but not travel to and from homes / constituencies and Westminster. tCO2e: tonnes of carbon dioxide equivalent kWh: kilowatt hours

Note Figures for hotel usage are included in the expenditure on official business travel and gross emissions Scope 3 business travel. refurbishments and ‘Very Good’ ratings for measure and ultimately manage carbon in major refurbishments of heritage / listed the supply chain (scope 3 carbon) is currently buildings. being piloted by the R&R Programme using a template developed by the Environmental Achieving a reduction in Parliament’s direct Sustainability team. As scope 3 carbon carbon emissions (scope 1 and 2) continues is a significant and critical element of to be a priority, but, where appropriate, Parliament’s carbon reduction targets, the procurement specifications are used to pilot work will be assessed to see how it could encourage and specify requirements for be used more widely. reductions in our supply chain. Work to

Performance Report | Annual Report and Accounts 2019-20 34 Waste

2016-17 2017-18 2018-19 2019-20

Total waste 1,778 1,959 1,495 1,558 Hazardous waste Total 4 7 8 6

Non Non-hazardous waste Landfill 0 0 0 0 Financial

Indicators Reused/ Recycled/ 1,132 1,223 888 1,076 (tonnes) Recovered

Incinerated/ 641 728 599 476 energy from waste

8 Total disposal cost 539 415 432 606 Hazardous waste – 7 16 18 38 Total disposal cost Financial Indicators Landfill 0 0 0 0 (£’000s) Non-hazardous waste Reused/ Recycled 89 207 222 212 – Total disposal cost Incinerated/ 73 191 189 159 energy from waste

Waste in 2019-20 To be on track to meet this target, we should In line with the regulatory requirements of the have achieved a reduction of 28% by the end of waste hierarchy, the first priority of any waste 2019-20. The actual figure achieved was 22.4%, management programme is to avoid the creation so we are currently below target. We recycled of waste, with reusing and recycling waste being 69% of our waste (measured by weight) in 2019- the next best options. UK Parliament operates 20. Our long-term target is to reach a recycling with a zero waste to landfill policy. Our general rate of 75% by 2020-21. We are on course to office waste is disposed of by incineration at meet our long-term target for reducing waste an energy-from-waste facility. We continue generated. Whilst good progress has been made to prioritise achieving a reduction in waste and we are likely to be recycling over 70% of our generation and improvements in recycling rates. waste, external influences may affect our ability to meet our 75% target by the end of 2020-21. Our long-term target is to reduce the amount of waste generated (measured by weight) by 30% Performance against our target for reducing by 2020-21, relative to the 2008-09 baseline. the volume of waste generated has been mixed this year. There were increases in the volume

8 The total disposal cost includes other charges such as management fees, equipment costs and vehicle movements that cannot be attributed to the specific waste streams shown in the rows below.

Performance Report | Annual Report and Accounts 2019-20 35 of waste produced in the autumn as a result Ongoing promotion of the ‘right waste, of the General Election, when Members of the right bin’ messaging has been taking place to House of Commons who stand down or are encourage positive outcomes in relation not returned typically have large amounts of to waste and recycling. This includes a paperwork to dispose of securely. On a more refresh of the messaging using different positive note, this also resulted in the highest communication channels, including awareness single monthly figure for the proportion of stands, newsletter articles and electronic waste recycled, which was around 80%. screens.

Recent activity to reduce waste and increase Training on the segregation of waste has been recycling ongoing with those responsible for transferring In May 2018, Parliament announced a and consolidating waste on the Parliamentary comprehensive range of steps to drastically Estate. An initial pilot audit of office waste reduce its consumption of single-use plastics. segregation took place in March 2020. It is While the majority of these initiatives were intended that these will be undertaken further implemented in 2018-19, the remaining initiative across the Estate as part of an engagement was introduced in this financial year. This was exercise, and reduce incorrectly disposed of the phase out of plastic carrier bags from retail waste in the compostable and recycling waste outlets across the Parliamentary Estate. These streams. were replaced with paper or other alternatives where this was feasible saving approximately Minimising waste also featured as one of the 40,000 plastic bags a year. categories in an assessment of the Catering teams of both Houses as part of the Sustainable Since replacing the non-recyclable catering Restaurant Association’s ‘Food Made Good’ disposable items such as take-away boxes, standard. We achieved high scores in the soup containers, take-away cups and cutlery categories of ‘reduce, reuse and recycle’ and with sustainably sourced, plant-based and ‘waste no food’ compared to the SRA average certified compostable alternatives, and and other similar organisations we were introducing a new waste stream to collect benchmarked against. these items, we have diverted 21 tonnes of waste from incineration and sent it for The Environmental Sustainability team have composting instead. been supporting the programmes and projects

Finite Resource Consumption – Water

2016-17 2017-18 2018-19 2019-20

Non-Financial Supplied 91,567 77,467 87,595 64,395 Water Consumption Indicators (m3) Abstracted 94,793 107,055 160,622 154,953

Financial Indicators Water Supply Costs 204 324 231 338 (£’000s)

Performance Report | Annual Report and Accounts 2019-20 36 responsible for upcoming decants of the Estate which, once abstracted from the ground, will ensuring waste and recycling provisions are replenish. considered in all refurbishments. Automated meter readers have been installed Water consumption in 2019-20 across the Parliamentary Estate which enable Parliament’s long-term target for water use is to the Environmental Sustainability team to reduce the volume used by 50% by March 2021, monitor mains water usage closely, identifying relative to the 2008-09 baseline. In order to instances of high consumption, including meet this target, our 2019-20 water use should potential leaks which require urgent action. have fallen by 46.2% by the end of 2019-20. The actual figure achieved was a 32.2% reduction, John Benger so we are behind the target. Accounting Officer 14 July 2020 Abstracted borehole water accounted for 70% of total water use across the Parliamentary Estate in 2019-20 and has a significantly lower negative environmental impact than mains water supply. The main driver of Parliament’s consumption of abstracted water is cooling for Portcullis House. There was a significant increase in water consumption during 2018- 19 due to additional demand on the water for cooling because of the exceptionally warm weather in 2018. In 2019 there were several issues found with the boreholes including damaged controllers, sensor issues and scheduling issues which caused the system to abstract water unnecessarily. These issues have now been rectified, and the expectation is that 2020-21 should see a reduction in borehole water use in Portcullis House that will move us closer to our target.

Recent developments in reducing water consumption The Northern Estates Programme and Restoration and Renewal will use borehole water for cooling and grey water from boreholes will also be used. This could increase abstraction rates, although there are plans to reinject the used water directly back into the aquifer. This will have a lower environmental impact than using electrical cooling and ventilation, since water is a renewable resource

Performance Report | Annual Report and Accounts 2019-20 37 Performance Report | Annual Report and Accounts 2019-20 38 2. Accountability Report

Corporate Governance 40 Statement of Accounting Officer’s Responsibilities 40 Governance Statement 41 Remuneration and Staff Report 64 a) Remuneration policy 64 b) Staff Report 70 Parliamentary Accountability and Audit Report 75 a) Statement of Parliamentary Supply 75 b) Statement of Parliamentary Supply Commentary 78 Parliamentary Accountability Disclosures 85 a) Losses and special payments 85 b) Fees and Charges 85 c) Remote Contingent Liabilities 86 Certificate and Report of the Comptroller and Auditor General to the House of Commons 87 Opinion on financial statements 87 Opinion on regularity 87 Basis of opinions 88 Emphasis of matter – material uncertainty regarding property valuation 88 Conclusions relating to going concern 88 Responsibilities of the Accounting Officer for the financial statements 88 Auditor’s responsibilities for the audit of the financial statements 89 Other Information 90 Opinion on other matters 90 Matters on which I report by exception 90 Report 91

Performance Report | Annual Report and Accounts 2019-20 39 Accountability Report Corporate Governance

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

Accountability Report | Annual Report and Accounts 2019-20 40 Governance Statement9 out of the Consolidated Fund, in respect of the House of Commons, are used for the purposes The House of Commons Commission is the intended by Parliament. I am responsible for ultimate authority for the administration the preparation of the House of Commons of the House, but day to day management Administration accounts and their transmission of the organisation is delegated to the to the Comptroller and Auditor General. I am House of Commons Executive Board (CEB). also responsible for the use of public money As Accounting Officer, I am mindful of HM and the stewardship of assets. Treasury’s guidance on the scope of the governance statement as it applies to In delivering this role I am supported by the Government departments, but I emphasise House of Commons Commission, the Commons that the House’s constitutional and governance Executive Board and its sub-boards. circumstances are different to those of Government departments. As Accounting Officer, I am required to prepare an annual governance statement. Likewise, the extent to which the House This statement records the stewardship of the Service is able to follow the Treasury’s House of Commons Administration, drawing Corporate Governance Code will differ. together evidence on governance and risk Significant variations from the Code include management. The statement is intended to the fact that the CEB is not equivalent to the give a sense of both the House of Commons single management board of a Whitehall Administration’s vulnerabilities and also how department. I am content that the House the organisation has coped with the challenges Service’s structure meets the overall objective it faced during the year. of separating policy and operations, and that the necessary element of non-executive Governance framework of the House challenge and scrutiny is available through of Commons the external members of the Commission and In recent years the Governance framework of the Administration Estimate Audit and Risk the House has undergone substantial changes, Assurance Committee. following the report of the House of Commons Governance Committee and the subsequent Scope of responsibility House of Commons Commission Act 2015. I was appointed as Accounting Officer by the Further changes arose from an organisational Speaker, on behalf of the House of Commons review conducted by the Director General, and Commission, with effect from 1 March 2019 from a review of the operating arrangements in accordance with section 3, subsection (2) of the CEB in November 2017. of the House of Commons (Administration) Act 1978. The House of Commons has a robust governance framework. The governance Under the terms of my appointment, I am structure is designed to manage risk to a responsible for ensuring that resources reasonable level rather than to eliminate all authorised by Parliament and sums to be paid risk of failure to deliver services, aims and

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

Accountability Report | Annual Report and Accounts 2019-20 41 objectives; it therefore provides reasonable The Commission is also supported by the and not absolute assurance. The structures Administration Estimate Audit and Risk and controls provide clarity and accountability Assurance Committee (AEARAC).10 The AEARAC in managing the delivery of the House Service’s supports the Accounting Officer in discharging administrative objectives. They ensure the his responsibilities under the Administration House Service has the capacity to make Estimate, particularly with regard to the decisions, monitor performance and assess maintenance of an effective system of internal and manage resources and risk. control. It is chaired by Dr Rima Makarem, an external member of the House of Commons Under the House of Commons (Administration) Commission. Since April 2017, the AEARAC Act 1978 (as amended by the House of has also had an enhanced role in providing Commons Commission Act 2015), the House of independent assurance to the Commission, Commons Service is overseen by the House of and to the Accounting Officer, that the system Commons Commission which is chaired by the of risk management is operating effectively Speaker. The Commission sets the strategic and that risk is being effectively managed framework for the provision of services to by the organisation and monitored by the the House, Members and to the public; signs CEB. The AEARAC also has oversight of the off the annual budget (the Estimate) for the work of Internal Audit and the external audit House; and is the legal employer of House carried out for the House by the Comptroller Service staff. and Auditor General. More detail about the AEARAC is provided in their annual report The Commission has delegated day-to-day (pages 132-141). management to the CEB since November 2017. The CEB is accountable to the Commission for the delivery of the strategy for the House Service and also manages the day to day operation of services.

The Commission is supported by two Select Committees of the House which act as advisory bodies to the Commission. The Administration Committee, chaired by Sir Charles Walker MP, recommends improvements to services. The Finance Committee, chaired by Lilian Greenwood MP, considers expenditure and the House’s budgets.

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

Accountability Report | Annual Report and Accounts 2019-20 42 Commission Speaker, Leader of the House, Nominee of the Leader of the Opposition, Backbench Commissioners x 4*, External Appointees x 2, Clerk of the House, Director General of the House of Commons

Commons Administration Executive Board Estimate Audit & Risk Finance Administration The Director General of the Assurance Committee Committee Committee House of Commons (Chair), 2 Backbench Commissioners*, the Clerk of the House, 2 Members of the Finance 11 Members 11 Members the Managing Directors Committee, 2 External of House Teams and Appointees of the Directors of bicameral Commission, 1 External departments Appointee e e r e Prepar Delive Prepar Assur

House Service

* As of 14 July 2020 there is one vacant post on the House of Commons Commission for a backbench Commissioner. This vacancy also a ects membership of the AEARAC.

Accountability Report | Annual Report and Accounts 2019-20 43 Governance Structure

Supports Advises Consultative Panel Speaker’s Offi ce on Parliamentary Speaker Security Advises Works of Art Committee Chairs

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

Administration Advises Committee Attends

Clerk of Assures the House

Director General Delegates power to Chairs

Commons Executive Board Manages

Independent Finance, Governance Chamber and HR and Complaints and Portfolio and and Central Committees Diversity Grievances Performance Services Scheme*

In-House Parliamentary Parliamentary Research and Services Security Participation Digital Service* Information and Estates Department*

* Joint service with the House of Lords

Accountability Report | Annual Report and Accounts 2019-20 44 Organisational structure of the House continued to implement changes throughout of Commons Service this financial year. There have been two changes to the organisational structure during the financial More recently, the Member Services team year 2019-20: the separate Governance and was formally established in February 2020 Communications Offices merged to become to implement enhanced HR advice and Governance and Central Services from 1 July support for MPs and their staff. This is 2019. A decision was also taken that, in the intended to expand on the work we already light of responsibility for the Restoration & do in providing HR support to Members. Renewal programme transferring to a new The team has been set up following statutory body (see below) the part of Strategic recommendations made by Gemma White Estates remaining within the House Service QC, who carried out an independent inquiry would merge with In-House Services to form a into the bullying and harassment of Members’ single team under the leadership of a newly- parliamentary staff. appointed Managing Director. This took effect from January 2020. The House of Commons Service is also supported by the Parliamentary Procurement The House of Commons Service is comprised and Commercial Service, a shared service of the following teams, a number of which based in the House of Lords Finance provide shared services to the House of Lords: Department, and the Parliamentary Archives, also based in the Lords. • Chamber and Committees • Finance, Portfolio and Performance • Governance and Central Services • Human Resources and Diversity • In-House Services and Estates • Parliamentary Digital Service (a joint department with the House of Lords) • Parliamentary Security Department (serves both Houses) • Participation

The Independent Complaints and Grievance Scheme (ICGS), which was first established in July 2018 to handle concerns and complaints about bullying and harassment or sexual misconduct, became a fully-fledged independent team in December 2019. A small Cultural Transformation team was established in February 2019 to lead on cultural change in the Commons, translating the recommendations from the Dame Laura Cox report into tangible, measurable and lasting change and holding the CEB to account for delivering this change. This has

Accountability Report | Annual Report and Accounts 2019-20 45 House of Commons Commission The membership of the Commission during 2019-20 was:

Name Served Attendance

The Rt Hon John Bercow MP; Speaker until 31 October 2019 5/5 (Chairman, by virtue of office)

The Rt Hon Sir Lindsay Hoyle MP; Speaker from 4 November 5/5 (Chairman, by virtue of office) 2019

The Rt Hon Andrea Leadsom MP; until 22 May 2019 2/2 Leader of the House of Commons (by virtue of office)

The Rt Hon Mel Stride MP; from 23 May 2019 2/2 Leader of the House of Commons (by virtue of office) to 24 July 2019

The Rt Hon Jacob Rees-Mogg MP; from 25 July 2019 6/6 Leader of the House of Commons (by virtue of office)

Sir Paul Beresford MP until 22 March 2020 5/9

The Rt Hon Tom Brake MP until 6 November 2019 5/5

Stewart Hosie MP until 14 May 2019 0/1

The Rt Hon Valerie Vaz MP full year 9/10

Sir Charles Walker MP from 23 March 2020 1/1

Rt Hon Dame Rosie Winterton MP full year 10/10

Peter Wishart MP from 15 May 2019 6/9

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

Dr John Benger; Clerk of the House (by virtue of office) full year 10/10

Dr Rima Makarem,11,12 external member full year 9/10

Jane McCall,11 external member full year 10/10

Note that since the 2019 General Election there has been a vacancy on the Commission because Tom Brake was not re-elected

11 External members are not voting members of the House of Commons Commission.

12 Dr Rima Makarem was the Chair of the House of Commons Administration Estimate Audit and Risk Assurance Committee for the full year.

Accountability Report | Annual Report and Accounts 2019-20 46 Annual Report of the House of Commons report into the bullying and harassment Commission of Members’ staff. The Commission met ten times during 2019- • Endorsing the action plan for 20. Minutes of Commission meetings – the implementation of the recommendations “Decisions” – are published on its pages on the in response to the six-month review of Parliament website.13 During the period covered the ICGS. by this report the Commission dealt with a • Working with the parties to encourage range of administrative and financial matters completion of the ‘Valuing Everyone’ including: training by Members. • Agreeing the Outline Business Case for • Overseeing the House Service’s response the Northern Estate Programme, as well to COVID-19 to ensure the House of as the budget for the Programme for Commons remained able to conduct its 2020-21, and endorsing the proposed core functions during the pandemic, approach to formalising the integration whilst operating in line with Public Health of the Programme with the Restoration England guidance. This has included the and Renewal (R&R) Programme. commissioning of a new system to allow • Overseeing the establishment of the Members to participate virtually in the R&R Sponsor Body as a statutory entity, House’s proceedings. separate to Parliament, including the • Facilitating the extension of the setting of its budget for the first three Independent Complaints and Grievance months of its operation. Scheme (ICGS) to non-recent cases in • Agreeing a refreshed House of Commons response to the Dame Laura Cox’s report Strategy for the next six years. into the bullying and harassment of • Agreeing a new strategy for the House staff. Parliamentary Security Department for • Agreeing the establishment of a new the next six years. independent expert panel with the power • Agreeing Votes on Account and to determine ICGS cases and decide Estimates for 2020–21 in respect of the on sanctions which will implement the Administration and Members Estimates. last of Dame Laura Cox’s three main • Agreeing the Supplementary Estimate recommendations. for the Members Estimate 2019–20. • Overseeing the implementation of the • Agreeing proposals for the amendment House Service’s Cultural Transformation of the House of Commons broadcast Programme, established in response licence to be put to the BBC. to Dame Laura Cox’s report, including revisions to the rules governing access to facilities and services on the Parliamentary Estate on a trial basis. • Agreeing the establishment of a new Member Services team as part of the House’s response to Gemma White QC’s

13 https://www.parliament.uk/business/committees/committees-a-z/other-committees/house-of-commons- commission/agendas-decisions-bulletins/decisions/decisions-20200000/

Accountability Report | Annual Report and Accounts 2019-20 47 Commons Executive Board The management of the House Service and its operations is delegated by the Commission through an Instrument of Delegation to the CEB. The membership of the CEB between 1 April 2019 and 31 March 2020 was as follows:

Name Served Attendance

Mostaque Ahmed, Managing Director of Finance, from 1 May 2019 17/17 Portfolio & Finance and Director of Finance

Ian Ailles, Director-General (Chair) full year 17/19

until 31 December Carlos Bamford, Managing Director, In-House Services 13/16 2019

Myfanwy Barrett, Managing Director of Corporate Services until 31 May 2019 3/3 and Director of Finance

John Benger, Clerk of the House full year 19/19

Isabel Coman, Managing Director, In-House Services from 16 March 2020 0/0 and Estates

Sarah Davies, Clerk Assistant and Managing Director, from 29 April 2019 16/17 Chamber and Committees (a)

Mandy Eddolls, Managing Director, Human Resources from 13 May 2019 9/17 and Diversity

Paul Evans, Acting Managing Director, Chamber until 28 April 2019 0/2 and Committees (a)

David Hemming, Interim Managing Director, Strategic until 30 September 8/11 Estates 2019

Eric Hepburn, Director of Security for Parliament full year 14/19

Tracey Jessup, Chief Information Officer and Director full year 15/19 of the Parliamentary Digital Service

Edge Watchorn, Acting Managing Director, Participation full year 14/19

Penny Young, Librarian and Managing Director, Research full year 15/19 and Information and Participation

Note: (a) Sarah Davies additionally represented Chamber and Committees at two CEB meetings in April 2019 prior to her appointment as Clerk Assistant.

Accountability Report | Annual Report and Accounts 2019-20 48 There is also a standing invitation for the Estates, supported by an Interim Directors of Communications and the Head Technical Director, John Pelton, who of Governance and Central Services to attend attended CEB. CEB meetings. • Sarah Davies took up her appointment as Clerk Assistant on 29 April 2019. Additionally, the Clerk, the Director General Prior to this Paul Evans served as Acting and the Director of Finance are empowered Managing Director of Chamber and to meet before and after each Commission Committees and was a member of CEB. meeting together with the Head of Governance • In February 2019 Julie Harding took up and Central Services, in order to consider a one-year appointment as Independent matters relating to staff pay and any other Director – Cultural Transformation. Julie matter as so decided by the CEB. Harding left the House of Commons on 28 January 2020 and Sarah Petit In the last financial year there have been a was appointed as the new Cultural number of changes of personnel at senior Transformation Director. Sarah management level, which have resulted previously supported Julie with this work in changes to the composition of the CEB. and her appointment will ensure the These changes also reflect changes in House Service continues the work that organisational structure. Julie started.

• Prior to the departure of Myfanwy The CEB provides leadership for the House of Barrett, a short consultation exercise Commons Service. It acts as a sub-committee took place and it was agreed that the of the Commission and is accountable to it. role of Managing Director of Corporate Its responsibilities are: Services should be split to reflect the two key areas of responsibility: finance • To assist the Commission in setting and HR. In May, Mostaque Ahmed strategic objectives for the House of was appointed as the new Director of Commons Service, and to be accountable Finance and Managing Director of the to the Commission for the delivery of the Finance, Portfolio & Performance team, strategy. while Mandy Eddolls was appointed as • To assist the Finance Committee in the Managing Director of Human Resources preparation of the Estimates and of and Diversity. other papers relating to those Votes, • During 2019-20 it was decided to merge before their submission to the House In-House Services and Strategic Estates. of Commons Commission; and to carry Isabel Coman was appointed to the out such other functions relating to the new post of Managing Director, In- expenditure on the administration of House Services and Estates and joined House of Commons services as may the House Service on 16 March 2020. from time to time be allocated to it Preliminary work to start merging the by the Commission. two teams has begun, with completion • To fulfil the statutory responsibilities expected in summer 2020. Between delegated to it by the House of October 2019 and March 2020 Ian Ailles Commons Commission in relation to the had formal responsibility for Strategic employment of House staff.

Accountability Report | Annual Report and Accounts 2019-20 49 • To direct the House of Commons on 8 October 2019. This means that the Administration, deciding policy and Restoration and Renewal Programme will operational issues as delegated to it be delivered by: by the Commission, the Speaker or the Clerk, managing performance KPIs and • An independent Sponsor Body made up driving efficient use of resources. of parliamentary and external members, • To provide assurance to the which acts on behalf of Parliament and Administration Estimate Audit and will set the scope, budget and timescale Risk Assurance Committee on the for the works; and management and mitigation of risk. • A Delivery Authority equipped with • To support the Clerk in the exercise of his/ the expertise to keep costs down and her responsibilities as Corporate Officer, manage a project of this complexity. Accounting Officer and Head of the House of Commons Service, and to support the Both the Sponsor Body and Delivery Director General in the exercise of his/her Authority were established in shadow form responsibilities. in the first instance as part of the House Service. The Sponsor Body was then The CEB is committed to creating a unified established in its statutory form on House Service, listening to staff and involving 8 April 2020 while the Delivery Authority senior leaders. It is also committed to working was established by the Sponsor Body in partnership with the House of Lords as a company limited by guarantee Management Board. in May 2020.

During the year the CEB completed a process A number of financial safeguards are also of 360-degree reporting, in order to reflect written into the Act, including an Estimates on themselves individually and as a Board. Commission made up of parliamentarians It also reviewed its composition and working to scrutinise the Sponsor Body’s spending methods in order to work more effectively. plans. The Sponsor Body has announced This resulted in the decision to offer a a Strategic Review of the R&R programme. standing invitation to additional attendees to the CEB since May 2019, as described The Sponsor Body is governed by a Board. above. Liz Peace CBE was appointed as the chair of the Shadow Sponsor Board in July 2018. Decisions of the CEB are available on the UK During 2019-20 further senior appointments Parliament website.14 were announced:15

Restoration and Renewal programme • Sarah Johnson became the Chief The Parliamentary Buildings (Restoration Executive of the Shadow Sponsor Body and Renewal) Bill received Royal Assent on 2 October 2019 and became Chief

14 https://www.parliament.uk/mps-lords-and-offices/offices/commons/the-board/board-decisions/ceb- decisions/

15 Further details of these appointments can be found at https://restorationandrenewal.parliament.uk

Accountability Report | Annual Report and Accounts 2019-20 50 Executive and Accounting Officer of a further delegation letter to the heads of the Sponsor Body by agreement of the each team of the House on appointment, Board when it took statutory form on and they receive an annual budget letter. 8 April 2020. The heads of each team submit to the Clerk • Mike Brown MVO was confirmed as the an annual letter of assurance, setting out how Chair of the Shadow Delivery Authority they have ensured the effective and efficient board on 17 October 2019 and took up management of the responsibilities delegated his responsibilities in July 2020. to them and their team. • David Goldstone CBE was confirmed as the Chief Executive of the Shadow Delivery Sub-groups of the Commons Authority on 21 January 2020 and took up Executive Board his responsibilities in July 2020. The CEB has two sub-committees (House of Commons only) and six sub-boards which are The Clerk is Accounting Officer, Corporate bicameral (with the House of Lords). Powers Officer and Data Controller, and responsible are delegated to these groups, and, where for ensuring proper stewardship of resources necessary, decisions are referred from the and for maintaining an appropriate system groups to the CEB. of internal controls. He issues a delegation letter to the Director-General, who issues

Accountability Report | Annual Report and Accounts 2019-20 51 Group Role

Commons-only sub-committees

Risk Oversight Committee Oversees the risk management process across Chair: Director General, the House of Commons and has operational House of Commons responsibility for managing the House of Commons Principal Risk Register.

Senior Remuneration Committee Makes recommendations to the Clerk of the House Chair: Bronwen Curtis CBE on pay for staff in the Senior Commons Service (external appointment) (House of Commons and Digital Service only).

Bicameral sub-boards

Business Resilience Group Directs and reviews business resilience policy, Chair: Black Rod, House of Lords strategy and implementation across both Houses.

Digital Strategy Board Responsible for monitoring the delivery of the Digital Chair: Clerk of the Parliaments, Strategy for Parliament. It supports the work of the House of Lords Digital Service, in ensuring that digital delivery is at the forefront of Parliament’s work.

Information Authority Provides a focus for informed decision-making Joint Chairs: Senior Information Risk Owner, about the effective management and security House of Lords and Senior Information Risk of our information. Owner, House of Commons.

Joint Investment Board Translates the high-level investment objectives set Chair: Director General, by the Boards of both Houses into a Medium Term House of Commons. Investment Plan through a rolling prioritisation exercise.

Parliamentary Safety Assurance Board Provides leadership and oversight of fire and Joint Chairs: Director of Facilities, House safety management. of Lords, and Head of the Governance and Central Services, House of Commons.

Parliamentary Safeguarding Board Ensures that appropriate safeguarding practices Chair: Clerk Assistant, House of Lords. and procedures are in place for the young people and vulnerable adults who visit Parliament or who engage with Parliament through outreach activities.

Accountability Report | Annual Report and Accounts 2019-20 52 System of Internal Controls Plan. The ROC continued to monitor the As Accounting Officer, this governance Principal risks during the year, regularly statement represents my assurance that I am ‘horizon scanning’ to identify areas of concern satisfied that the organisation’s system of which may impact upon the delivery of the internal control is effective. corporate strategy. Risk appetite statements have been identified for each Principal risk The House Service has policies and procedures which help inform discussions on how to that underpin its governance arrangements. manage the risks effectively in line with the These include rules and guidance on finance corporate strategy. These ‘risk appetite’ and procurement, a Staff Handbook which sets statements are also used by the ROC to out HR policies and practices and a mandated help gauge the totality of risk facing the system of risk management. All managers organisation in relation to the management are required to be familiar with, promote and and scoring of the Principal risks. comply with these policies and procedures. The ROC is supported in its work by the Risk The House of Commons has a system of risk team, who meet with ROC risk leads each management which is reviewed annually by quarter to review the Principal risks. In Internal Audit. Under the current governance addition, the Risk team support teams across arrangements for risk management, the House the House in the identification, assessment of Commons Commission is responsible for and management of team risks for inclusion the strategic overview of the risk management on team risk registers. The Risk team also run system, which includes oversight and review risk management training courses which cover of the Principal (strategic) risks. Delegated the risk management ‘five-step’ framework responsibility for the day to day management and facilitate risk workshops to discuss and of risk lies with the CEB who meet as the embed risk management processes across the Commons Executive Board: Risk Oversight House Service. Committee (ROC). During 2019-20 the ROC met five times. In March 2020, the ROC discussed the rapidly changing COVID-19 crisis from a risk The ROC’s role is to oversee the risk management perspective and agreed to management processes across the House of consider the wider and longer-term implications Commons, and includes the management of of COVID-19 and its impact on the organisation the Principal risk register which captures the early in the new year as part of its annual risks that impact on our strategic objectives; review of the Principal risks. Such is the scale each Principal risk is allocated to a member of the impact of COVID-19 on the organisation of the ROC to own as the risk lead. The ROC that, in the first instance, the pandemic is being also provides appropriate assurance to the managed under a discrete mechanism, but has Commission and the Administration Estimate subsequently been subsumed into formal risk Audit and Risk Assurance Committee (AEARAC) structures. It is in my view being appropriately on how effectively those risk management managed by the COVID-19 Planning Group, with processes are working. mechanisms in place (and under daily review) to manage the rapidly changing situation. In April 2019, the ROC undertook its annual The Risk team is directly supporting both the review of the Principal risks to ensure they Incident Management team and the COVID-19 aligned to the 2019-20 Corporate Business Planning Group.

Accountability Report | Annual Report and Accounts 2019-20 53 The top ten 2019-20 House of Commons Principal risks (as at 31 March 2020) were as follows:

Risk description Mitigations

Cyber-attack The Parliamentary Digital Service continues to respond to the risk with against a comprehensive set of controls and management actions. A three-year parliamentary programme of work (from April 2019 to March 2022) is under way to systems causes continue to manage the risk adequately given the evolving threat, and to serious disruption enable the design and delivery of an integrated cyber security service to to the strategic plan avoid the need for further programmes in future. objectives and to the work of Members and their staff.

Failure to deliver the We established the Decant Moves Programme in March 2019 to underpin Decant Programme the Northern Estate Programme and the Restoration and Renewal of the successfully and Palace of Westminster. on time will impact We have continued to work on designing and preparing for the restoration negatively on and renewal of the Palace of Westminster, including securing options and Business as Usual accommodation to support the preferred full decant solution. Services across the House and the New leasehold accommodation in Victoria Street, Broadway and Waterloo Restoration and has been secured as decant accommodation, with the Broadway property Renewal Programme being the proposed location for the Sponsor Body and Delivery Authority. In addition, the freehold of a property in Dartmouth Street that was previously leased has now been acquired.

Failure to comply We have put in place a Corporate Safety Strategy (2019-2021) which is with health and bringing more consistency to operational safety risk management; we are safety requirements on track to move safety assurance for low frequency / high impact from and successfully Limited to Moderate by 2021. embed a positive This plan was endorsed by the Clerks of both Houses and Director safety culture across General, House of Commons in October 2019. We are continuing to the estate. monitor progress against the action plan and report quarterly to the Parliamentary Safety Assurance Board.

Breach of security We have continued to provide robust security arrangements for the causing, or likely Parliamentary Estate, working with the Metropolitan Police, responding to to cause, harm high levels of protest, delivering the Security Programme, and reviewing to people or the future security requirements in the light of the NEP and R&R programmes. Parliamentary We have rolled out the Security Vetting and Pass programme to ensure Estate, or serious the effective and efficient delivery of personnel security. Members’ security disruption to away from the estate has been a priority area with a number of additional parliamentary mitigations put in place to reduce the risk of harm. business.

Accountability Report | Annual Report and Accounts 2019-20 54 Risk description Mitigations

The House Service During the year we set up a Parliament-wide training programme does not have ‘Valuing Everyone’ to help tackle bullying, harassment and sexual the right people misconduct. We trialled a new staff performance management process capability or ‘Coach and Focus’ with a team from each business area in the House capacity to deliver and Digital Service. We also launched a new ‘Guardians’ programme, an its strategic goals initiative created originally by the Old Vic theatre, to provide an informal way for staff to share their concerns about any unacceptable behaviour in the workplace. In March 2020 we set out our HR strategy for 2020 to 2025 setting out our priorities and plans to ensure that we deliver on what matter to our people and the organisation in the 21st century.

There is a risk that In 2019-20 the risk description was broadened to ‘Cultural the Commons Transformation’ to reflect the work in hand, led by the Independent Executive Board’s Director – Cultural Transformation, on changing the culture responses to within Parliament. During the year, all of Dame Laura Cox’s key the ‘Cultural recommendations were implemented and a ten-point plan was agreed Transformation’ to bring our ‘values’ – Inclusive, Courageous, Trusted, Collaborative – to programme of life linked to our vision ‘Everyone has a Voice’. As part of this work, we work are viewed recruited 35 members of staff as ‘Voice Champions’. as partial and We undertook an all staff ‘culture’ survey in January/February 2020 inadequate. This which has provided useful baseline data to help us track progress on results in a further issues such as bullying, harassment and sexual harassment. Results diminution of the from the survey were broadly positive, and show that work to change House’s reputation our culture is beginning to have an impact. More concerning results and weakens the have informed implementation priorities for the coming year, which trust that exists include BAME inclusion and building confidence to report unacceptable between the House behaviour. authorities and staff. We have also set up a dedicated ‘Culture Hub’ on the intranet, bringing together a range of tailored resources to help support staff and build capacity of managers to deliver culture change.

The House suffers a We continue to monitor and review our reputation, both internally and loss of reputation, externally, using data, including survey data provided by the Insight through the team. action or inaction We have brought in new out-of-hours processes so we can provide 24/7 (perceived or news coverage which includes more proactive monitoring of news, actual) of House online and social media. Staff or failure to live up to our values. We launched a new regional communications approach to provide a better service to regional audiences.

Accountability Report | Annual Report and Accounts 2019-20 55 Risk description Mitigations

The House fails Our Information Authority (IA) has continued to review and strengthen to comply with its performance, most recently by recruiting a Non-Executive Director to data regulations assist on estate and buildings issues in particular. and manage, The IA updated and re-launched the Parliamentary Protective Marking protect or exploit Scheme. its information adequately. The IA reviewed its procedures at the start of the COVID-19 pandemic to ensure that it could respond rapidly to the increase in assurance requests that followed as a result of remote working both by Members and staff. It has reviewed its Terms of Reference and agreed a clear set of priorities which includes continued assurance services for Restoration and Renewal during the first half of 2020-21 as a time limited transition. We also recognise that there is still work to do with some teams to ensure compliance with GDPR essentials.

The House Service We have continued to monitor the level, pace and effect of change fails to manage across the organisation. the pace or impact We have a new vision for the House Service, ‘Everyone Has a Voice’, and of change across four new Values, ‘Inclusive, Courageous, Trusted, Collaborative’, which the business and puts people at its centre. this affects the ability of staff to Change Programmes are monitored and controlled and regularly deliver their core reviewed by appropriate House bodies. work and prevents the organisation from delivering its strategic goals.

Failure to ensure We achieved legal separation of the R&R Sponsor Body and Delivery that the House Authority by the date set in the Parliamentary Buildings (Restoration of Commons and Renewal) Act 2019. The Act also required development of a requirements are Parliamentary Relationship Agreement (PRA) with the Sponsor Body. fully reflected in This was developed during the year and establishes broad principles, the planning and roles and responsibilities to guide the relationship between both houses subsequent delivery and the Sponsor Body. Schedule 9 of the PRA identifies the allocation of R&R and that of strategic risks, where risks have transferred, where risks remain with there is a clear either or both Houses and where risks are shared. Whilst this is not agreed design and a comprehensive register of all risks, it does provide a framework to handover back into monitoring risk as R&R progresses. a live environment.

Accountability Report | Annual Report and Accounts 2019-20 56 Review of effectiveness and to mitigate against duplication and The evidence base overlapping responsibilities. As Accounting Officer, I have responsibility for reviewing the effectiveness of the system Whilst there were some areas of concern, of Internal Controls. In order to undertake the basic structure of the Governance Risk this review, I have obtained evidence of the Management and Control (GRC) framework organisation’s effectiveness through a variety was in place and operating at an appropriate of means. The most important are: the annual level. Evidence from the audits conducted letters of assurance from each Head of by the House of Commons audit team and team and the Parliamentary Digital Service; bicameral audits performed by the Lords separate letters of assurance on security, on provide no evidence that the GRC framework information security (from the Information has deteriorated over the past year. There Authority), on business resilience (from the are several significant risks facing the House, Business Resilience Group), on projects and and significant issues that have materialised programmes (from the Joint Investment during the year; however, the balance of Board), on health and safety (from the evidence leads to the conclusion that the Parliamentary Safety Assurance Board) and on overall opinion for 2019-20 is ‘Moderate’. the operation of the Independent Complaints and Grievance Service; the Director of Internal The Head of Internal Audit notes there are Audit’s annual report and opinion; advice and inherent challenges in producing one singular reports from the Administration Estimate Audit opinion for an organisation as complex and and Risk Assurance Committee; and reports diverse as the House of Commons. His opinion from the external auditor, the Comptroller and of Moderate is based on an overall view as Auditor General. The letters from Heads of to the effectiveness of the GRC framework, team were subject to internal challenge and but there are various issues that have arisen review through a process led by Governance throughout the year. These include continued & Central Services and Finance, Portfolio & issues and concerns with safety management, Performance. In addition, account has been risks associated if the measures introduced taken of the monthly corporate performance to address bullying and harassment are not reports and quarterly risk reviews. adequate, and lack of consistency in relation to the quality of contract management and The Head of Internal Audit concluded in procurement support infrastructure. his annual report and opinion that there have been no significant changes to the For 2019-20, the Moderate is caveated by governance structure nor to Internal Audit’s the concerns noted above and management opinion that the basic arrangements in place will need to continue to remain focused and are in line with what one would assume invest time and effort to at least maintain an for an organisation of its size and inherent appropriate GRC framework in the future. complexity. Given the unique nature of the organisation and its essentially federal Throughout 2019-20 several issues and risks structure, there are a number of factors have emerged, and those of significant concern that restrict the ability to streamline the are set out below. governance structure. Management need to remain vigilant to ensure the scope of governance bodies remains fit for purpose

Accountability Report | Annual Report and Accounts 2019-20 57 Significant issues and its catering outlets. Parliamentary staff COVID-19 and Parliament’s response were also designated as key workers which Following the outbreak of the COVID-19 allowed them to access schools if required pandemic in the UK in early 2020, Parliament, and later to access testing for COVID-19. with guidance from Public Health England (PHE), implemented a number of measures to The second part of our approach was to manage the response and protect those on mitigate risks to the core functions of the the Parliamentary Estate. House of Commons. Integral to this were the procedural and technological preparations As with many other organisations, the speed that were made at speed to support the and magnitude of the pandemic presented running of the hybrid Commons. The speed a significant challenge to Parliament. On and sophistication of the technological 27 February a bicameral COVID-19 planning solutions that have been developed has group of officials was established which meant a key risk that COVID-19 presented met daily (and continues to meet regularly) to the House of Commons, namely that to coordinate the response across the the House would not be able to fulfil its House of Commons and House of Lords. The democratic function, has been mitigated. safety of everyone on the Parliamentary Estate has been central to all of the work Key milestones in setting up the hybrid House and decisions that have been made by the of Commons included: COVID-19 planning group. Ahead of the formal Government Guidance being published both • Virtual participation by Members in Select Houses had already implemented the majority Committee proceedings was approved of measures later recommended for being by the House on 24 March, and the first a COVID-19 secure workplace. Parliament virtual meeting took place on 26 March formally announced it was a COVID-19 secure following rapid technological preparation. workplace on 2 June 2020. • Hybrid scrutiny proceedings were developed and implemented from 22 April The response can be considered in two broad and allowed for up to 2 hours each day categories – operational and procedural. of departmental questions, ministerial The planning group was not responsible for statements, Prime Minister’s Questions procedural matters. and Urgent Questions. • Hybrid substantive proceedings were Operationally the risks to House staff, developed and implemented from 27 April Members and their staff, and the visitors to which allowed for up to 4 hours of debate the Parliamentary Estate were the principal in the Chamber (in addition to scrutiny concern. Action was taken to reduce access proceedings). to the Estate initially by stopping admission • Remote divisions were developed and of non-essential visitors, and soon after that implemented from 11 May, which enabled by encouraging working from home for all Members to vote remotely. staff (and Members’ staff) who were able to. • Remote elections for two vacant We implemented a number of public health Select Committee Chair positions were measures including making hand sanitiser approved on 22 April 2020. An electronic available, measures to support social ballot for the two positions took place distancing, and reducing access to the Estate on 6 May.

Accountability Report | Annual Report and Accounts 2019-20 58 The impact of COVID-19 has been so committee meetings. The approval is for ubiquitous that it has affected every aspect public proceedings only, which should serve of the House’s functions to a greater or to limit the risk of confidential information lesser degree, but it has had a particularly being compromised, however, there is a risk significant impact on the bicameral that it will be used for private meetings. broadcasting team, the Parliamentary Digital Overall, I am content that the changes have Service and the Chamber and Committees been essential to keep Parliament working, team, who have had to focus a majority of but at least in the short term it is likely that their resources on delivering a hybrid House they have increased the difficulty of ensuring of Commons. The In-House Services and the effective management of parliamentary Estates team has played a key role in ensuring information. I am mindful that the assurance that the Parliamentary Estate has remained provided to me on these matters is strictly a safe place to work and in delivering the time-limited and will need to be monitored modifications to the Commons chamber. and reviewed in due course.

The response has required a major Much of the impact that COVID-19 will have reprioritisation towards urgent work, such had on the way we work will only become as the roll out of Microsoft Teams, in PDS. clear in the coming months. We are already This has impacted the delivery of previously looking at how some of the new ways of committed actions. I am concerned about working may be incorporated into future how this will affect the rest of the House working practice going forward and how service in delivering their objectives if flexibility around greater working from these are reliant on digital support. This home might benefit staff. A staff survey was has already been highlighted as an issue undertaken in May 2020 to provide evidence of throughout 2019-20 so I will be monitoring staff experiences of working during lockdown. this very closely in the forthcoming year. A process of reprioritisation will also need to take place under the strategic direction of For areas such as information security it has the House of Commons Commission to ensure meant there has been greater flexibility than that the House Service is focusing on the right usual in response to the pandemic. New, priorities. lighter-touch approval routes have been introduced to enable faster decisions on new COVID-19 remains very much a live issue and systems and digital change. This is enabling I will continue to monitor and update our us to work at pace, with the best available activities in line with broader public health information. However, this is done with the advice and general guidance, and manage knowledge that there may be an increased the risks that occur. chance of information risks being imperfectly understood and that issues such as an Restoration and renewal of the Palace increase in the use of unapproved software of Westminster systems (‘shadow IT’) may become more On 8 April 2020 the Sponsor Body was prevalent. established in statutory form and officially took responsibility for the Restoration and An example of these risks is provided by Renewal (R&R) programme as mandated the approval of Zoom for broadcasting by the Parliamentary Buildings (Restoration Commons and Lords proceedings and public and Renewal) Act 2019. Its formation

Accountability Report | Annual Report and Accounts 2019-20 59 signals the establishment of an independent Strategic Estates parliamentary body that will be responsible The Strategic Estates team has had a and accountable to Parliament for the challenging year. It has suffered from a lack delivery of the R&R programme that will of dedicated leadership, with the departure tackle the work needed to protect the Palace, of the interim Managing Director at the ensuring it can continue to serve as the home end of September 2019 and the arrival of a of the UK Parliament in the 21st century and permanent lead being delayed until March beyond. Many teams across both Houses 2020. There has also been a significant have been involved this year in preparing restructuring of the team with In-House for this significant transfer over to the Services being merged with Strategic Estates Sponsor Body including the finance following the departure of the Managing departments, HR departments and security, Director of In-House Services in December and managing the risks inherent to such 2019. In addition, with the transfer of the a significant change. R&R programme to the Sponsor Body and the impact that has had on Strategic Estates Much of the way the relationship will personnel, it has been a period of instability be managed has been set out in the for the team. Parliamentary Relationship Agreement (PRA), a document which is required by the Act.16 Strategic Estates has a large and complex This document has been developed over the risk portfolio which includes the Northern last year to establish broad principles to Estates Programme and Elizabeth Tower guide the relationship between both houses project. In its self-assessment the Strategic and the Sponsor Body. Schedule 9 of the PRA Estates team identified that risk had not been provides a table that identifies the allocation regularly reviewed over the past year and of risks – where risks have transferred, where this remains a concern to me. However, they risks remain with either or both Houses and have improved risk management processes where risks are shared. Whilst this is not a and I am confident that with new leadership comprehensive register of all risks and it will in place the overall management of the team need continual assessment, it does provide will improve. a useful framework to monitoring risk as R&R progresses, and this will be a focus for the Safety management R&R team. There remains further work to be The Parliamentary Safety Assurance Board done to finalise the remaining Schedules and has provided me with a review of safety Appendices of the PRA which are outstanding management across the Parliamentary (but not time critical) and these will be Estate. I am concerned that they can provide completed in due course. only a limited level of assurance with regard to construction safety across the Estate I note the Sponsor Body has announced – especially as it was anticipated that a Strategic Review of the R&R programme the changes made last year would embed and I will follow closely that review. sufficiently well to provide a moderate level of assurance by now.

16 See https://restorationandrenewal.uk/about-us/governance for more detail.

Accountability Report | Annual Report and Accounts 2019-20 60 They note that while meaningful and Senior Information Risk Owners (SIROs) improvements have been made to risk have sent a letter to the Managing Director of management during the year, there are each team setting out their data protection still gaps in defining what needs to be done responsibilities. However, I shall therefore and some serious incidents this year have continue to monitor this issue closely in the resulted from major non-compliances. There next financial year and will be expecting is still evidence indicating that there are greater assurance in the coming year. inconsistencies with the way in which risk control measures are put in place, and an Bullying, harassment and workplace culture over-reliance on paperwork being a good There has been a continued focus on performance measure. They have also cultural transformation to address the highlighted concerns which arose during issue of bullying and harassment of House the year over the management of traffic of Commons staff that was documented in / pedestrian interfaces on the Northern the report by Dame Laura Cox in October Estate, although improved working practices 2018. In her report she highlighted three key were implemented towards the end of the recommendations and I can now confirm financial year. This has included increasing that all three recommendations have the number of marshals in the area who been implemented. In December 2019 the have the authority to stop both vehicles and Independent Complaints and Grievance pedestrians. In addition, movable fences Scheme (ICGS) became an independent have been sourced and are used to prevent bicameral team and they have investigated pedestrians ‘bypassing’ the marshals. As the 82 complaints since their establishment, of estate traffic increases post COVID-19 these which 34 are still in progress. In June 2020 measures will be reviewed for effectiveness the House passed a resolution which agreed and any further adjustments will be made. an independent process for determining complaints of bullying and harassment Data Protection brought by House staff against Members of An internal audit report on the Parliament. implementation of the General Data Protection Regulation (GDPR) provided These represent significant and visible only limited assurance. Whilst the report steps towards changing the culture recognised that the assurance was within Parliament. Indeed, whilst cultural significantly improved where Information transformation takes time data we have Rights and Information Security (IRIS) are collected as part of the staff survey is showing directly involved, it also recognised that that there has been a significant increase in compliance with GDPR essentially resides the number of staff who believe we now take with teams and not centrally. The extent to bullying and harassment seriously. There is which teams are effectively managing the still work to do however and I am committed risks relating to GDPR varies significantly from to ensuring that this process continues and team to team, and this was also borne out in that the processes and procedures we have the feedback gathered during the assurance introduced are robust, resilient and effective. challenge process. Management actions have been agreed with the Internal Audit team

Accountability Report | Annual Report and Accounts 2019-20 61 In June 2020 I established a sub-group of the performance, risk management and Diversity and Inclusion steering group, which I internal controls, and I am satisfied that chair, to focus on issues specifically related to the mechanisms in place to manage risks race. The objectives of the Black, Asian, and are adequate. Minority Ethnic (BAME) Advisory Group are to: John Benger • Tackle any racism at the House of Accounting Officer Commons and Parliamentary Digital 14 July 2020 Service and reduce racial inequality. • Increase representation of BAME communities among our staff. • Improve the experiences of all those in BAME communities who access our services, take part in our activities and visit the House of Commons. • Create an anti-racist culture and remove barriers to BAME staff thriving.

The group will help provide the necessary time, expertise, experience and challenge required to tackle racism and I am committed to continuing and improving the work we have been doing to address this most serious of issues.

Whistleblowing The House has a whistleblowing policy which was most recently updated in April 2019 and is accessible to all through our Staff Handbook (chapter 19) and via our intranet. This policy sits alongside our other policies available to employees including the grievance process, Independent Complaints and Grievance Scheme, safeguarding policy, and Health and Safety policies. In the last 12 months there has been one investigation carried out under the whistleblowing procedure. An independent investigator was appointed and none of the allegations raised were upheld, even at appeal.

Conclusion I remain confident that the governance arrangements in place have in general allowed me to assure myself of the House’s

Accountability Report | Annual Report and Accounts 2019-20 62 Accountability Report | Annual Report and Accounts 2019-20 63 Accountability Report Remuneration and Staff Report

This section of the report sets out the financial fast stream roles received higher increases that information and commentary about the included pay progression. Increases ranged Commons Executive Board and staff pay for the between 2.7% and 5.2%, however the small year ended 31 March 2020. number of staff in the fast stream received awards ranging from 9.1% to 15.8%. Staff in Catering pay bands received a consolidated pay award of 3%. a) Remuneration policy Fully effective performers in the SCS pay group The House of Commons Commission has also received at 2.7% increase, however structural delegated to the Clerk of the House responsibility changes to pay band minima for SCS1 and SCS1A for ensuring that staff complement, grading, pay bands resulted in pay increases for some pay and conditions of service of staff are broadly affected staff ranging between 3% and 10.1%. in line with those of the Home Civil Service. The House operates three separate pay structures; Remuneration Senior Commons Structure (SCS, in line with (salary, benefits in kind and pensions) Senior Civil Service grades); Catering Staff; and Commission external members the remaining staff of the House (A-E grades). The Commission is supported by two external There is also a separate pay structure for former members who receive remuneration for their Metropolitan Police staff (MPS) that transferred services as follows: into the House of Commons Service in April 2016. The House of Commons is an accredited London Salary Living Wage employer. External members (£’000) 2019-20 2018-19 The pay award for the financial year 2019- J Gaymer DBE 10-15 – 20 was effective from the 1st April 2019 (until 30 September 2018) (25-30 FYE) and included some changes to legacy pay 10-15 arrangements. The overall cost of the pay ward R Makarem 25-30 (25-30 FYE)17 for all pay groups was 3% of the pay bill. J McCall 25-30 20-25 Fully effective performers in the A-E pay group Figures in table have been subject to audit and the Metropolitan Police Service (TMPS) group received pay increases of at least 2.7%. Some The external members do not receive any bonus staff paid below the target rate for the job or in payments, benefits-in-kind or pension benefits.

17 2018-19 salary re-stated

Accountability Report | Annual Report and Accounts 2019-20 64 Commons Executive Board The salary and benefits in kind of members of the Commons Executive Board were:

Bonus Benefits Pension Salary (a) Payments in kind (b) benefits18 Total Officials (£’000) (£’000) (£’000) (£’000) (£’000) 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 D Natzler, KCB 170-175 – – – – 16.3 – 25.0 – 210-215 (until 28 February 2019) (185-190 FYE) J Benger (g) 185-190 130-135 5-10 – 6.0 – 526 70 725-730 200-205 I Ailles (c) 170-175 165-170 5-10 – – – – – 175-180 165-170 M Ahmed (g) 95-100 – – – – – 96 – 195-200 – (from 1 May 2019) (105-110 FYE) M Barrett (d) 20-25 125-130 – – – – 3 18.6 20-25 140-145 (until 31 May 2019) (120-130 FYE) C Bamford (d) 80-85 (until 31 105-110 – – – – 19.6 19.3 100-105 125-130 (110-115 FYE) December 2019) I Coman 5-10 – – – – – 2 – 5-10 – (from 16 March 2020) (145-150 FYE) S Davies (g) 115-120 – – – – – 285 – 400-405 – (from 29 April 2019) (125-130 FYE) M Eddolls 100-105 – – – 0.4 – 40 – 140-145 – (from 13 May 2019) (115-120 FYE) P Evans (c) 5-10 5-10 – – – – – – 5-10 5-10 (until 28 April 2019) (115-120 FYE) (115-120 FYE) D Hemming (e) 155-160 40-45 – – – – 21 15 175-180 55-60 (until 30 September 2019) (105-110 FYE) (105-110 FYE) E Hepburn 110-115 105-110 5-10 – – – 56 40 175-180 145-150 T Jessup (f) 115-120 105-110 – – – – 72 106 185-190 210-215 P Young 100-105 125-130 – – – – 41 49 145-150 170-175 E Watchorn 85-90 – – – – – 59 – 140-145 – Figures in table have been subjected to audit (a) Salary includes gross salary and allowances. (b) Benefits in kind: The monetary value covers any benefits provided by the House and treated by HM Revenue and Customs as a taxable emolument. These figures represent the benefit from the residences that officers are required to use in the course of their duties. (c) I Ailles and P Evans have opted out of the Civil Service pension arrangements. (d) Two board members, M Barrett and C Bamford, have opted to have partnership pensions rather than joining the Civil Service Pension Scheme. The figures shown under pension benefits are the employer’s contributions. (e) Compensation for loss of office: D Hemming received a compensation payment of £90,000-£95,000 when he left the House of Commons on 30 September 2019 following an organisational restructure. (f) The salary and pension benefits for the Managing Director of the Parliamentary Digital Service are paid directly by the House of Commons; 30% of the costs are recharged to the House of Lords. The salary and pension benefits disclosed represent the total remuneration package paid between the two Houses. (g) The value of pension benefits: The total remuneration figures for J Benger, M Ahmed and S Davies are significantly higher in 2019-20 than in 2018-19 because of increases in their pensionable salary. This resulted in a corresponding increase in their pension benefits, as is the case with all final salary linked schemes.

18 The value of pension benefits accrued during the year is calculated as the real increase in pension multiplied by 20, plus the real increase in any lump sum, less the contributions made by the individual. The real increases exclude adjustments due to inflation or the transfer of pension rights.

Accountability Report | Annual Report and Accounts 2019-20 65 Fair Pay Disclosure Total remuneration includes annualised salary, Reporting bodies are required to disclose the non-consolidated performance-related pay and relationship between the remuneration of the benefits-in-kind. It does not include severance highest-paid employee in their organisation payments, employer pension contributions and and the median remuneration of the the cash equivalent transfer value of pensions. organisation’s workforce. In 2019-20, one employee’s total remuneration The following table shows the ratio of the was more than the highest paid member of the median of all House staff remuneration Commons Executive Board (2018-19: one). Total compared to the highest paid employee: remuneration ranged from £5,000 to £220,000 (2018-19: £4,000 to £200,000). 2019-20 2018-19 Pension benefits (audited) Highest earner’s total 215-220 195-200 The pension entitlements for the members remuneration (£000) of the Commons Executive Board, covering Median of total 33,860 32,183 the period during which they were on the Board, remuneration (£) were as follows (for 2018-19 figures, see House Ratio 6.42 6.14 of Commons Annual Report and Accounts, Figures in table have been subject to audit HC 2434):

Accrued pension and Real increase in pension CETV at CETV at Real related lump sum at and related lump sum 31/3/20 31/3/1919 increase in 31/3/20 (£000) at 31/3/20 (£000) (£000) (£000) CETV (£000) 75-80 plus a lump 22.5-25 plus a lump J Benger 1,893 1,307 548 sum of 235-240 sum of 70-72.5 M Ahmed (from 25-30 plus a lump 2.5-5 plus a lump sum 399 320 60 1 May 2019) sum of 50-55 of 5-7.5 S Davies (from 40-45 plus lump sum 12.5-15 plus a lump 744 500 216 29 April 2019) of 100-105 of 30-32.5 D Hemming (until 5-10 0-2.5 62 45 10 30 September 2019) I Coman (from 0-5 0-2.5 2 – 1 16 March 2020) M Eddolls (from 0-5 0-2.5 31 0 23 13 May 2019) 50-55 plus a lump 2.5-5 plus a lump E Hepburn 1,139 1,018 59 sum of 15-20 sum of 0-2.5 E Watchorn 15-20 2.5-5 227 180 33 30-35 plus a lump 2.5-5 plus a lump T Jessup 458 397 36 sum of 65-70 sum of 2.5-5 P Young 10-15 0-2.5 199 157 27 Figures in table have been subject to audit

19 The figures may be different from the closing figures in the 2018-19 Annual Accounts due to the Cash Equivalent Transfer Values (CETV) factors being updated to comply with the Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008.

Accountability Report | Annual Report and Accounts 2019-20 66 Civil Service Pensions benefit arrangement or a ‘money purchase’ Pension benefits are provided through the Civil stakeholder pension with an employer Service pension arrangements. From 1 April contribution (partnership pension account). 2015 a new pension scheme for civil servants was introduced – the Civil Servants and Others Employee contributions are salary-related Pension Scheme or alpha, which provides and range between 4.6% and 8.05% for benefits on a career average basis with a members of classic, premium, classic plus, normal pension age equal to the member’s nuvos and alpha. Benefits in classic accrue State Pension Age (or 65 if higher). From at the rate of 1/80th of final pensionable that date all newly appointed civil servants earnings for each year of service. In addition, and the majority of those already in service a lump sum equivalent to three years initial joined alpha. Prior to that date, civil servants pension is payable on retirement. For premium, participated in the Principal Civil Service benefits accrue at the rate of 1/60th of final Pension Scheme (PCSPS). The PCSPS has four pensionable earnings for each year of service. sections: three providing benefits on a final Unlike classic, there is no automatic lump sum. salary basis (classic, premium or classic plus) Classic plus is essentially a hybrid with benefits with a normal pension age of 60; and one for service before 1 October 2002 calculated providing benefits on a whole career basis broadly as per classic and benefits for service (nuvos) with a normal pension age of 65. from October 2002 worked out as in premium. In nuvos a member builds up a pension based These statutory arrangements are unfunded on their pensionable earnings during their with the cost of benefits met by monies voted period of scheme membership. At the end by Parliament each year. Pensions payable of the scheme year (31 March) the member’s under classic, premium, classic plus, nuvos earned pension account is credited with 2.3% and alpha are increased annually in line of their pensionable earnings in that scheme with Pensions Increase legislation. Existing year and the accrued pension is uprated in line members of the PCSPS who were within 10 with Pensions Increase legislation. Benefits years of their normal pension age on 1 April in alpha build up in a similar way to nuvos, 2012 remained in the PCSPS after 1 April 2015. except that the accrual rate is 2.32%. In all Those who were between 10 years and 13 years cases members may opt to give up (commute) and five months from their normal pension pension for a lump sum up to the limits set by age on 1 April 2012 will switch into alpha the Finance Act 2004. sometime between 1 June 2015 and 1 February 2022. All members who switch to alpha have The partnership pension account is a their PCSPS benefits ‘banked’, with those stakeholder pension arrangement. The with earlier benefits in one of the final salary employer makes a basic contribution of sections of the PCSPS having those benefits between 8% and 14.75% (depending on based on their final salary when they leave the age of the member) into a stakeholder alpha. (The pension figures quoted for officials pension product chosen by the employee from show pension earned in PCSPS or alpha – as a panel of providers. The employee does not appropriate. Where the member has benefits in have to contribute, but where they do make both the PCSPS and alpha the figure quoted is contributions, the employer will match these the combined value of their benefits in the two up to a limit of 3% of pensionable salary (in schemes.) Members joining from October 2002 addition to the employer’s basic contribution). may opt for either the appropriate defined Employers also contribute a further 0.5%

Accountability Report | Annual Report and Accounts 2019-20 67 of pensionable salary to cover the cost of The figures include the value of any pension centrally-provided risk benefit cover (death in benefit in another scheme or arrangement service and ill health retirement.) which the member has transferred to the Civil Service pension arrangements. They The accrued pension quoted is the pension the also include any additional pension benefit member is entitled to receive when they reach accrued to the member as a result of their pension age, or immediately on ceasing to be buying additional pension benefits at their own an active member of the scheme if they are cost. CETVs are worked out in accordance with already at or over pension age. Pension age The Occupational Pension Schemes (Transfer for the pension schemes is 60 for members Values) (Amendment) Regulations 2008 and of classic, premium and classic plus, 65 for do not take account of any actual or potential members of nuvos, and the higher of 65 or reduction to benefits resulting from Lifetime State Pension Age for members of alpha. Allowance Tax which may be due when pension (The pension figures quoted for officials benefits are taken. show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in Real increase in CETV both the PCSPS and alpha the figure quoted is This reflects the increase in CETV that is the combined value of their benefits in the two funded by the employer. It does not include the schemes, but note that part of that pension increase in accrued pension due to inflation, may be payable from different ages.) contributions paid by the employee (including the value of any benefits transferred from Further details about the Civil Service pension another pension scheme or arrangement) and arrangements can be found at the website uses common market valuation factors for the www.civilservicepensionscheme.org.uk start and end of the period.

Cash Equivalent Transfer Values Gender and Ethnicity Pay Gap data A Cash Equivalent Transfer Value (CETV) is the The following data is for House of Commons actuarially assessed capitalised value of the only and does not include PDS. pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies.

Accountability Report | Annual Report and Accounts 2019-20 68 Gender and Ethnicity Pay Gap data

Proportion of staff

Male Female White BAME

54.1% 45.9% 76% 24%

Hourly pay gap

Mean Median

Gender pay gap 0.3% 1.7%

Ethnicity pay gap 20.4% 8.7%

Bonus pay gaps

Mean Median

Gender pay gap 15.2% 0.0%

Ethnicity pay gap 77.0% 0.0%

Proportion receiving a bonus

Male Female White BAME

14.8% 14.5% 17.0% 11.6%

Percentage of male and female in each quartile

Male Female White BAME

Upper 52% 48% 90% 10%

Third 59% 41% 82% 18%

Second 57% 43% 71% 29%

Lower 49% 51% 62% 38%

Accountability Report | Annual Report and Accounts 2019-20 69 b) Staff Report

Staff costs and related numbers The House of Commons staff costs comprise:

2019-20 2019-20 2018-19 2018-19 Charged Charged 2019-20 Charged Charged 2018-19 to revenue to capital to revenue to capital budgets budgets Total budgets budgets Total

£000 £000 £000 £000 £000 £000

Wages and salaries 96,630 1,546 98,176 89,997 775 90,772

Social security costs 10,223 259 10,482 9,326 139 9,465

Other pension costs 23,908 392 24,300 17,196 109 17,305

Contributions to 404 – 404 345 1 346 stakeholder pensions

Sub Total 131,165 2,197 133,362 116,864 1,024 117,888

Inward secondments/ 9,905 3,720 13,625 9,633 2,398 12,031 agency staff

Sub Total 141,070 5,917 146,987 126,497 3,422 129,919

Less recoveries in respect of outward (1,512) – (1,512) (960) – (960) secondments

Total net costs 139,558 5,917 145,475 125,537 3,422 128,959

Figures in table have been subject to audit

The increase in staff costs when compared to assets and liabilities. The full actuarial the prior year can be explained by additional valuation was carried out as at 31 March 2016. security staff and an increase in staff Details can be found in the resource accounts resources to deliver large capital projects and of the Cabinet Office: Civil Superannuation programmes. (https://www.civilservicepensionscheme.org.uk/ about-us/resource-accounts/). The Principal Civil Service Pension Scheme (PCSPS) and the Civil Servants and Others For 2019-20, employer contributions of £24.3 Pension Scheme (CSOPS), known as ‘alpha’, million (2018-19: £17.3 million) were payable are unfunded, multi-employer, defined benefit to the civil service pension schemes at one of schemes in which the House of Commons is four rates in the range 20.0 to 24.5 per cent of unable to identify its share of the underlying pensionable pay, based on salary bands. The

Accountability Report | Annual Report and Accounts 2019-20 70 Scheme Actuary reviews employer contributions PCSPS to cover the cost of the future provision every four years following a full scheme of lump sum benefits on death in service and valuation. The contribution rates are set to meet ill health retirement of these employees. the cost of the benefits accruing during 2019-20 Contributions due to the partnership pension to be paid when the member retires, and not providers at the reporting period date were £nil the benefits paid during this period to existing (2018-19: £nil). pensioners. Exit packages Employees can opt to open a partnership Departure costs during 2019-20 have been pension account, a stakeholder pension with an calculated in accordance with the provisions employer contribution. Employers’ contributions of the Civil Service Compensation Scheme of £0.4 million (2018-19: £0.3 million) were paid (CSCS), a statutory scheme made under to one or more of a panel of three appointed the Superannuation Act 1972. Exit costs are stakeholder pension providers. Employer accounted for in full in the year that the contributions are age-related and range from departure is agreed. The House did not run 8% to 14.75% of pensionable pay. Employers a voluntary exit scheme in 2019-20. also match employee contributions up to 3% of pensionable pay. In addition, employer Ill-health retirement costs are covered by contributions of £16,000 (0.5%; 2018-19: the pension scheme and are not included £13,000) of pensionable pay, were payable to in the table.

Exit package cost Number of redundancies Number of other departures agreed

2019-20 2018-19 2019-20 2018-19

<£10,000 – – 3 1

£10,000 – £25,000 – – 1 2

£25,000 – £50,000 – – 2 6

£50,000 – £100,000 – – 5 –

Total number of exit – – 11 9 packages by type

Total Resource cost (£) – – 456,240 243,405

Figures in table have been subject to audit

Accountability Report | Annual Report and Accounts 2019-20 71 Average number of persons employed Sickness absence data The average number of full-time equivalent The recorded sickness absence figure for (FTE) persons employed during the year 2019-20 stands at 5.2 average working including those staff involved in delivering days lost per person. (2018-19: 5.5 average shared services funded by the House workings days). of Lords, were: Staff policies applied during the financial year 2019-20 2018-19 Candidates are asked at application stage if they require any adjustments at any stage Average number 2,817 2,609 of the recruitment process, for example (permanent staff) additional time to undertake written tests. The House Recruitment team are responsible Average number 66 73 for ensuring that requests for adjustments (agency staff) from candidates are managed effectively. In some cases, this may require liaison with the Diversity and Inclusion team and Staff composition the Adjustments Officer. In addition, the The House holds information of the number of House runs a ‘Recruiting for Excellence’ one people who have declared a non-binary gender; day training course which is mandatory for the figures are too low to publish as it may be managers to attend prior to recruiting new possible to identify individuals. The following staff – this course includes a session on table analyses the number of people in each of diversity. The House also introduced a set the two main genders. of training requirements called ‘the essentials’, which all staff had to complete in the reporting year. These included financial At 31 March 2020 Male Female training (for budget managers), diversity and inclusion training and fire safety training. CEB 4 6 Expenditure on consultancy SCS 55 38 During 2019-20 £2,530,000 was incurred on consultancy costs (2018-19: £1,360,000). Employees 1,615 1,342 Consultancy costs include costs associated with advising or recommending a course of action but does not include the costs of implementing that advice or action. The At 31 March 2019 Male Female increase during the year relates to work undertaken by the Independent Complaints CEB 5 4 and Grievance Scheme, the development of the Restoration & Renewal Sponsor Body SCS 48 34 and accommodation reviews.

Employees 1,520 1,231 Tax arrangements of Public Appointees On 23 May 2012 the Treasury published Review of the Tax Arrangements of Public

Accountability Report | Annual Report and Accounts 2019-20 72 Sector Appointees, and on 24 August 2012 Off-payroll engagements within the the Cabinet Office published the Procurement Parliamentary Digital Service are reported in full Policy Note Tax Arrangements of Public in the following tables, along with the House of Appointees. Commons, even though their costs are shared with the House of Lords.

Table 1: For all off-payroll engagements as of 31 March 2020, for more than £245 per day and that lasted for longer than six months.

Number

Existing engagements as of 31 March 2020 44

Of which at the time of reporting have existed for: less than one year 9 between one and two years 18 between two and three years 5 between three and four years 11 for four years or more 1

Table 2: For all new off-payroll engagements, or those that reached six months in duration, between 1 April 2019 and 31 March 2020, for more than £245 per day and that last for longer than six months.

Number

New engagements, or those that reached six months in duration between 1 April 2019 37 and 31 March 2020

Of which:

Number assessed as caught by IR35 6

Number assessed as not caught by IR35 31

Number engaged directly (via PSC contracted to the House) 1

Number of engagements reassessed for consistency/assurance purposes during the year –

Number of engagements that saw a change to IR35 status following the consistency review N/A

Accountability Report | Annual Report and Accounts 2019-20 73 Table 3: For any off-payroll engagements of Of the 21 officials, 14 are members of the Board Members, and/or, senior officials with Commons Executive Board and 7 were senior significant financial responsibility, between 1 officials (not Board Members) with budgetary April 2019 and 31 March 2020 responsibility in excess of £10 million.

Number John Benger Accounting Officer Off-payroll engagements of 14 July 2020 board members, and/or senior officials with significant financial – responsibility, during the financial year.

Individuals that have been deemed ‘board members, and/or senior officials with 21 significant responsibility’, during the financial year both off-payroll and on-payroll.

Accountability Report | Annual Report and Accounts 2019-20 74 Accountability Report Parliamentary Accountability and Audit Report

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

Summary of Resource and Capital Outturn 2019-20

2019-20 2018-19 Estimate Outturn Outturn

Voted outturn Departmental compared Expenditure with Estimate: Limit Non- Non- saving/ equivalent20 Note Voted Voted Total Voted Voted Total (excess)21 Total

£000 £000 £000 £000 £000 £000 £000

Resource SoPS 1.1 440,500 – 440,500 412,988 – 412,988 27,512 264,204

Capital SoPS 1.2 348,500 – 348,500 294,175 – 294,175 54,325 141,504

Total 789,000 – 789,000 707,163 – 707,163 81,837 405,708

20 DEL equivalent represents Departmental Equivalent Limit equivalent as defined in the Main Estimate (HC 964) and Supplementary Estimate (HC 1963).

21 Explanations of variances between the Estimate and Outturn are provided in the Statement of Parliamentary Supply Commentary).

Accountability Report | Annual Report and Accounts 2019-20 75 Net cash requirement 2019-20

2019-20 2019-20 Outturn compared with 2018-19 Estimate Estimate Estimate: saving/ (excess) Outturn Note £000 £000 £000 £000 SoPS 3 633,500 522,108 111,392 346,009

Administration Costs 2019-20

2019-20 2019-20 2018-19 Estimate Estimate Outturn Note £000 £000 £000 SoPS 3 440,500 412,988 264,204

Notes to the Statement of Parliamentary Supply (SoPS) SoPS 1. Net outturn SoPS 1.1. Analysis of net resource outturn

Estimate Outturn 2019-20 2018-19 Variance net Outturn to Gross Income Net Gross Income Net Estimate Outturn

£000 £000 £000 £000 £000 £000 £000 £000 Spending in 459,300 (18,800) 440,500 431,607 (18,619) 412,988 27,512 264,204 DEL equivalent

SoPS 1.2. Analysis of net capital outturn

Estimate Outturn 2019-20 2018-19

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

£000 £000 £000 £000 £000 £000 £000 £000

Spending in 348,500 – 348,500 401,578 (107,403) 294,175 54,325 141,504 DEL equivalent

Accountability Report | Annual Report and Accounts 2019-20 76 SoPS 2. Reconciliation of net resource outturn to net operating expenditure

2019-20 2018-19 Note £000 £000 Outturn Outturn Total resource outturn in Statement of Parliamentary Supply SoPS 1.1 Voted 412,988 264,204 Non-Voted – – Donations classified as capital income (107,403) (11) Net Expenditure in Statement of Comprehensive Net 305,585 264,193 Expenditure

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

Net total outturn compared with estimate: Estimate Outturn saving/ (excess)

Note £000 £000 £000

Resource Outturn SoPS 1.1 440,500 412,988 27,512

Capital Outturn SoPS 1.2 348,500 294,175 54,325

Accruals to cash adjustments:

Adjustments to remove non-cash items:

Non-cash items – other 3 (155,500) (160,006) 4,506 administration costs

Adjustments to reflect movements in working balances:

Increase/(decrease) in inventories 10 – 91 (91)

Increase/(decrease) in receivables 12 – 4,123 (4,123)

(Increase)/decrease in payables 13 – (26,805) 26,805

(Increase)/decrease in payables 9.2 – (2,458) 2,458 falling due after more than one year

Use of provision 14 – – –

Net Cash Requirement 633,500 522,108 111,392

Accountability Report | Annual Report and Accounts 2019-20 77 b) Statement of Parliamentary The resource estimate shows an underspend Supply Commentary of £27.5 million. The main driver behind this variation is slower than expected delivery Scope of the Estimate of property projects. The Restoration and These accounts cover expenditure arising from Renewal Programme had a resource budget the administration of the House of Commons of £28.2 million for the financial year but only in supporting a thriving Parliamentary spent £9.8 million. Other property and estates democracy. The costs incurred cover the projects delivered to a value of £44.7 million general administration of the House of against a budget of £53.4 million; The rest of Commons and activities undertaken to meet the House spent to within 0.4% of the budget, Parliament’s objectives, associated commercial which included the December General Election activities; grants to organisations who promote and two state openings of Parliament, bringing the House of Commons’ objectives, and other unexpected additional cost pressures on the non-cash costs. Income arising from rental, House service. fees and charges in connection with activities within Parliament. Non-cash items totalled £160.0 million, £4.5 million over the budget. The component parts The cost of Members’ salaries, allowances and for this cost were; losses on revaluations, other related expenditure is borne in the main which totalled £111.6 million, including an by the Independent Parliamentary Standards impairment of £55.3 million against 1 Canon Authority (IPSA) Estimate; a small amount of Row in recognition of the value of capital works expenditure is met by the House of Commons against the value of the building and a £16.5 Members Estimate. million impairment of 21 Dartmouth Street, which represents the VAT paid within the Resources purchase price transaction which is capitalised The House of Commons Commission agreed in line with policy. Provisions for dilapidations a resource budget of £440.5 million (House on leased buildings totalled £12.3 million, of Commons Administration Supply Estimate including two new buildings at 64 Victoria 2019-20 HC 2173) in April 2019, with an income Street (£6.4 million) and 7 Wootton Street (£0.4 estimate of £18.8 million and an expenditure million), which have been acquired to support estimate of £459.3 million. A significant the Moves Programme. Depreciation against proportion of the resource estimate, £155.5 other assets totalled £36.5 million. million or 35% was a provision for non-cash expenditure, including depreciation. Whilst Capital there have been significant movements The House of Commons Commission also against the planning assumptions agreed a capital estimate of £348.5 million to underpinning the estimate, including changes support the works on the Parliamentary estate, to; the Parliamentary Estate as the House including the Northern Estate Programme and prepares for the Restoration and Renewal associated acquisition of properties. Programme; the expected business of the House, and an unexpected General Election Capital expenditure totalled £294.2 million, in December 2019, a supplementary estimate including the acquisition of 21 Dartmouth was not required and the House managed Street costing £104.5 million. The underspend within its originally agreed budget. of £54.3 million was due to slower than expected progress on some accommodation

Accountability Report | Annual Report and Accounts 2019-20 78 projects, with Fire Safety Works (including the create these new bodies in preparation underground car park) underspending by £5.4 for them to be standalone functions in million, the Mechanical, Electrical and Building the next financial year, including plans on Fabric project underspending by £8.3 million asset transfers, staff transfer and sharing and unallocated optimism bias contributing agreements, which have all be captured in £14.0 million to the underspend. Securing the Parliamentary Relationship Agreement – other accommodation as an alternative to 7 a document required under the legislation. Millbank (where the lease expires in 2021) was The House’s accounts include some charges £17.2 million lower than budgeted for in the for asset disposal, losses and provisions as it year. The Restoration and Renewal Programme accounts this year for functions transferring underspent its allocation by £9.4 million. These to the Sponsor Body and ceasing in the House are all projects and programme shared with the Administration. House or Lords, with only the Commons values included within these accounts. Offsetting some Work has continued in designing and preparing of this underspend was the Northern Estates for the restoration and renewal of the Palace Programme, which accelerated work in the year, of Westminster, including securing options and exceeding original expectations by £4.6 million accommodation to support the preferred full – this is a Commons only programme. There decant solution. were also increased costs on 1 Canon Row (£4.2 million more than the original annual budget), The contribution from the House of Commons is: which completed in the year and on the Elizabeth Tower, where additional works (£5.4 million in Resource Capital the year) were required after more detailed £ million £ million surveys and inspections were carried out. In September, the House also acquired the freehold Pre 2016-17 1.2 7.0 for Richmond House from the Department of Health. This building was originally treated as a 2016-17 1.3 2.7 finance lease, so the change in status has seen a recognition of income within the capital estimate 2017-18 1.8 3.9 of £107.4 million, with a counter charge against the capital expenditure estimate. The accounting 2018-19 4.0 12.0 treatment can be found in the notes to the accounts (note 1.4). 2019-20 9.8 23.7

Strategic Programmes Total 18.1 49.3 Restoration and Renewal The legislation to establish the Sponsor Body and Delivery Authority (the bodies needed to Further details about the Restoration and deliver the work) in statutory form was given Renewal Programme including the Shadow Royal Assent on 8th October 2019, as part Sponsor Body can be found at https:// of the prorogation process. This provided restorationandrenewal.parliament.uk the mechanism and date for the House to handover this programme to an independent Northern Estates Programme entity, which happened on 8th April 2020. The Northern Estate Programme involves Significant work has been undertaken to the refurbishment and redevelopment of five

Accountability Report | Annual Report and Accounts 2019-20 79 listed buildings, Norman Shaw North, 1 Derby In February 2020 the House of Commons Gate, Norman Shaw South, 1 Parliament Commission announced that the discovery of Street, and Richmond House. Works to Derby extensive Second World War bomb damage, Gate were scheduled to conclude in August pollution and asbestos in the Elizabeth Tower 2020, allowing for the programme to progress had pushed up the repair bill by an additional to the next building, however the on-going £18.6m. The full scale of the conservation, uncertainty caused by COVID-19 has delayed which is on track for completion in late 2021, this date to Winter 2020-21. A planning was only revealed once the project team was application was submitted for the Northern able to begin intrusive surveys for the first time. Estate Programme in October 2019. The costs to date for the House are: The costs to date for the House are: Capital Resource Capital £ million £ million £ million 2016-17 1.1 Pre 2016-17 0.1 1.2 2017-18 7.2 2016-17 3.0 6.8 2018-19 12.6 2017-18 0.7 13.2 2019-20 11.4 2018-19 0.6 44 Total 32.3 2019-20 4.0 88.4

Total 8.4 153.6 Moves The Moves Programme was established in March 2019 to play a critical role in enabling Elizabeth Tower the Northern Estate Programme, and the The aim of this project is to conserve and Restoration and Renewal of the Palace of refurbish Elizabeth Tower (home to Big Ben), Westminster, to take place. The programme including the Great Clock and the Ayrton light. will deliver changes to the shape of the estate The last time significant work was carried out through acquiring, designing and fitting out to the Tower was in 1983-85. The current work new parliamentary buildings, adapting the is the largest and most extensive maintenance Palace temporarily, and then engaging to project in the Tower’s 160-year history. deliver thousands of staff and Member moves in the run up to Restoration & Renewal, by The project is also tasked with providing a which time House staff will be occupying a new better means of emergency evacuation and to set of buildings, on a reshaped estate. New improve access to maintenance and a wider leasehold accommodation in Victoria Street, range of visitors, a lift is being installed within Broadway and Waterloo has been secured as the existing ventilation shaft of the Tower. decant accommodation, with the Broadway property being the proposed location for the Sponsor Body and Delivery Authority.

Accountability Report | Annual Report and Accounts 2019-20 80 In addition, the freehold of a property in Capital Dartmouth Street that was previously leased £ million has now been acquired. A business case to acquire a further leasehold building is Pre 2016-17 3.03 currently under review. 2016-17 0.95

Capital 2017-18 0.75 £ million 2018-19 0.87 Pre 2016-17 – 2019-20 0.58

2016-17 – Total 6.18 2017-18 – Fire Safety 2018-19 – The aim of this programme is to reduce the 2019-20 3.38 risk of fire across the Parliamentary Estate and help keep the building and those working Total 3.38 in it safe. These works include the installation of new fire alarm systems, new fire doors and other steps to enable fire compartmentation Encaustic Tiles and improving Personal Evacuation Plans. The Encaustic Tile Conservation Project While this work is underway other measures has been undertaken to reinstate the tile are in operation, including a 24-hour fire pavements on the Principal floor of the Palace patrol service. Later, the Restoration and since 2012. The tiles were introduced into Renewal programme will enable a thorough the Palace of Westminster by the architect overhaul of fire safety in the Palace of Charles Barry and designed by Augustus Westminster. Welby Pugin in 1847, and were a major part of the decorative element of the Palace’s Capital Gothic Revival architecture; however, since £ million then, heavy foot traffic has resulted in the deterioration of the tiles together with a loss Pre 2016-17 3.75 of original pattern. St Stephen’s Hall was the 2016-17 7.48 first area to be conserved following trials of manufacture and installation. The tiles 2017-18 12.41 are made by a specialist manufacturer in Shropshire, adjacent to one of the Ironbridge 2018-19 23.27 Gorge Museums and within a UNESCO World 2019-20 15.77 Heritage Site using the same traditional 19th century method of pouring coloured liquid Total 62.68 clay into a mould then firing the pattern onto the tile base using a kiln. Their installation is undertaken by stonemasons from a specialist Cast Iron Roofs conservation contractor. The cast iron tiled roofs were installed on cast and wrought iron structures in the mid-

Accountability Report | Annual Report and Accounts 2019-20 81 1800s, using the innovative technology of its mechanism to prepare the House for this new time. But 170 years on the roofs are leaking, standard. Future asset transactions for 2020-21 causing significant damage to the stonework were planned with the new standard in mind. and historic interiors of the Palace. To avoid In March 2020 the Financial Reporting Advisory further damage, a phased programme of Board agreed with HM Treasury to defer the repairs to the cast iron roofs of the Palace has implementation of the new standard to 1 April been underway since 2009. Alongside other 2021. Subsequently, the House will change its maintenance and conservation projects, the adoption date to 1 April 2021. Cast Iron Roofs Programme is conserving the whole of the Palace’s Cast Iron Roofs. Asset Management The value of the Parliamentary Estate is Capital difficult to ascertain due to the unique £ million buildings, adaptations and uses. Movements in the value are driven by the condition of the Pre 2016-17 13.15 building, general market conditions and other 2016-17 7.21 economic factors. The Palace of Westminster, an asset shared with the House of Lords, is 2017-18 6.56 valued on a depreciated replacement cost mechanism, using an index linked valuation 2018-19 7.94 method based on key building assumptions. 2019-20 8.68 The Houses engage a body independent to them both, the Valuation Office Agency, to Total 43.54 conduct the valuation of the Estate on their behalf. The Valuation Office Agency have valued the Estate for over 20 years and helped The COVID-19 pandemic has placed determine the original building assumptions. considerable pressure on the delivery of The use of the Palace has changed since projects across the estate, with work initially those original assumptions and the condition paused before safe working conditions could continues to deteriorate; thus, it is becoming be developed. This will impact and increase more essential to review the evaluation the long term cost of these projects, although criteria to ascertain if an appropriate value is the House is working to mitigate as much being given. This is a significant and invasive of the impact as possible. The pandemic exercise, but one both Houses are mindful to has also presented the House with an undertake when practically possible to do so. opportunity to review its working practices and accommodation needs, which may benefit The COVID-19 pandemic has also generated the Northern Estate Programme and Moves market uncertainty. The Parliamentary Estate Programme. was valued as at 31 March 2020, which was at the beginning of the government controls Additional Disclosures on movement and social distancing. The Adoptions of IFRS 16 pandemic has challenged all organisations Significant planning work was undertaken on working practices and questions will arise in preparation for the adoption of IFRS16 on whether significant office accommodation – Leases, which saw staff engage with HM needs to be kept if staff have been able to Treasury Officials and additional support work remotely effectively. If accommodation

Accountability Report | Annual Report and Accounts 2019-20 82 provision exceeds demand, then there will be a additional property has been acquired. consequence on market prices, which will have The House also has taken a leasehold for an impact on the value of the Parliamentary accommodation at 50 Broadway, with the Estate. It is too early to determine the impact aim to provide more space to accommodate on the House’s asset value and no provision the Restoration and Renewal Sponsor Body has been made within these accounts for it. and Delivery Authority and potentially the Investment properties were reassessed at Northern Estates Programme. Space within the end of the year, with an additional loss these buildings utilised by the Sponsor Body adjustment of £0.7 million made against the and Delivery Authority will be recharged on Bridge Street portfolio. The Valuation Office a fair usage basis. The House is reviewing its Agency, who value the estate, have reported accommodation needs in the light of COVID-19 on the basis of ‘material valuation uncertainty’. before determining its exact requirements. Consequently, less certainty and a higher During the year, Richmond House was degree of caution should be attached to the acquired on a freehold basis from the valuation than would normally be the case. Department of Health, having originally been acquired on a finance lease basis. Not included within the House’s breakdown of asset are buildings which the House Parliamentary Works Sponsor Body acquired for future financial years. As the On 8 April 2020, the Parliamentary Works House seeks to provide capacity within Sponsor Body became a separate entity to the the Estate to support the various strategic House and will take forward all works relating programmes, either to accommodate delivery to the Restoration and Renewal Programme. teams or provide decant accommodation, In turn, a Delivery Authority has been set up

Accountability Report | Annual Report and Accounts 2019-20 83 to deliver the works under the governance of opportunities to delivery the programme the Sponsor Body. Where the body was part in a different way. The review will report to of the House service, a process of separation the Sponsor Body Board in the Autumn. is being implemented, with staff, assets, contracts and data being migrated between Estimate for 2020-21 the Sponsor Body, the Delivery Authority and The 2020-21 Estimate has been agreed (HC the two Houses. A Parliamentary Relationship 290) and includes a resource budget of £420.1 Agreement has been drafted between the million, a capital budget of £382.6 million and two Houses and the Sponsor Body to set a cash requirement of £665.8 million. the framework for future working and the responsibilities of each party. In the beginning The Estimate includes provisions made for there is expected to be a level of disruption the Northern Estate Programme (resource as processes, procedures and people transfer budget £6.0 million and capital budget of between each separate entity. In the initial £106.0 million), which had been expected to period, staff from the House of Commons will be included within the Parliamentary Works be seconded to the Sponsor Body to continue Sponsor Body Budget and was included within the work which they were undertaking before their vote of account (HC 76). a formal transfer process is agreed and implemented. Assets and inventory are also Going concern expected to transfer from the House to the With the considerable uncertainity caused by Sponsor Body, as the House procured many COVID-19, the House has sought to reprioritise items in this reporting year to be utilised by its annual provision in order for it to respond the Sponsor Body in the next financial period appropriately to the pandemic, which has – these assets are predominantly IT related included the unplanned expenditure to (hardware and software). With the Sponsor create a hybrid parliament, using remote Body not becoming a legal entity until 8 April technologies to facilitate parliamentary 2020 the House has accounted for these items scrutiny and enabling working from home. within its statement of financial position. The With this reprioritisation the House will seek to Parliamentary Relationship Agreement also reduce the impact of the pandemic makes provisions for each party to provide on the Estimate, but some losses, like income services to the other and to charge for those from catering, retail and tours may not be services accordingly. The House continues to mitigated against and therefore any excesses provide office accommodation to the Sponsor that cannot be met will have to be funded from Body, initially at 7 Millbank and then at 50 a supplementary estimate. The House Broadway. All costs related to these property therefore maintains the position of a going transactions will be recovered by the House. concern and that funding can be requested The House is mindful in its obligation to avoid to support any shortfall and to manage any any onerous contracts and leases and all obligations. parties are working together to ensure these are mitigated as far as possible.

The Parliamentary Works Sponsor Body has also commissioned a review of the Programme. Whilst they have made it clear that the works to the Palace are essential, there may be new

Accountability Report | Annual Report and Accounts 2019-20 84 Accountability Report Parliamentary Accountability Disclosures

a) Losses and special payments b) Fees and Charges

This section is subject to audit This section is subject to audit

Losses Statement Fees and charges for all areas are set in accordance with the House of Commons policy. 2019-20 2018-19 Further details are available at https://www. parliament.uk/documents/commons-finance- Total number of cases 30 30 office/Financial-Policies/Fees-and-Charges- policy.pdf but the main principle is that the Total value of cases (£000) 65 2,037 House of Commons is first and foremost, a working institution. While the House does receive income, predominantly from catering, Details of cases over £300,000 retail and tours, this is incidental to its There were no cases over £300,000 in 2019-20 core function which is to support a thriving (2018-19: £1.8 million). parliamentary democracy.

Special Payments Where fees are levied, these adhere to the principles set out in Managing Public Money 2019-20 2018-19 and where possible, cover the direct cost of providing the service and make a contribution Total number of cases 115 41 towards overheads. Fees and charges are reviewed annually. Total value of cases (£000) 1,832 1,282 The main income streams are catering and visitor engagement activities (retail and This included two special payments which tours). During 2019-20, the House received exceeded £300,000 (2018-19: one) which £9.6 million income for catering (£10.8 million relates to a contractual dispute with a supplier. in 2018-19) and £4.5 million (£3.9 million for Further information cannot be provided due to 2018-19) for visitor engagement. Catering were commercial confidentiality. affected by the snap election and COVID-19. Tours and retail are expected to recover the cost of providing the service, however during

Accountability Report | Annual Report and Accounts 2019-20 85 2019-20 a number of events were cancelled at short notice due to COVID-19. The cost of these services was £0.9 million (2018-19: £0.9 million). The net cost of the catering services was £4.6 million (2018-19: £2.6 million).

Income is also received from other sources such as rent from investment properties, £1.0 million (2018-19: £1.0 million) (rents are set at market levels) and to a much lesser extent from areas such as broadcasting and filming. c) Remote Contingent Liabilities

This section is subject to audit

In accordance with IAS 37, the House discloses for parliamentary reporting and accountability purposes certain statutory and non-statutory contingent liabilities where the likelihood of a transfer of economic benefit is remote, in accordance with the HM Treasury publication Managing Public Money.

As at 31 March 2020 there is a remote contingent liability relating to Works of Art on loan from various collections. Whilst there is no expectation this will be triggered, the liability is estimated at £2.3 million. (2018-19: £2.3 million).

John Benger Accounting Officer 14 July 2020

Accountability Report | Annual Report and Accounts 2019-20 86 Accountability Report certificate and report of the comptroller and auditor general to the house of commons

Opinion on financial statements • the financial statements have been properly prepared in accordance with I certify that I have audited the financial the Financial Reporting Manual as statements of the House of Commons adapted or interpreted for the House Administration for the year ended 31 of Commons context. March 2020. The financial statements comprise: Statements of Comprehensive Net Expenditure, Financial Position, Cash Opinion on regularity Flows, Changes in Taxpayers’ Equity; and the related notes, including the significant In my opinion, in all material respects: accounting policies. These financial statements have been prepared under • the Statement of Parliamentary Supply the accounting policies set out within them. properly presents the outturn against voted Parliamentary control totals for I have also audited the Statement of the year ended 31 March 2020 and Parliamentary Supply and the related notes, shows that those totals have not been and the information in the Accountability exceeded; and Report that is described in that report • the income and expenditure recorded as having been audited. in the financial statements have been applied to the purposes intended by In my opinion: Parliament and the financial transactions recorded in the financial statements • the financial statements give a true conform to the authorities which and fair view of the state of the House govern them. of Commons Administration’s affairs as at 31 March 2020 and of its net expenditure for the year then ended; and

Accountability Report | Annual Report and Accounts 2019-20 87 Basis of opinions impact to the valuation of movements in the key assumptions underpinning this valuation. I conducted my audit in accordance with My audit opinion is not modified in respect International Standards on Auditing (ISAs) of this matter. (UK) and Practice Note 10 ‘Audit of Financial Statements of Public Sector Entities in the United Kingdom’. My responsibilities under Conclusions relating those standards are further described in to going concern the Auditor’s responsibilities for the audit of the financial statements section of my I have nothing to report in respect of the certificate. Those standards require me and following matters in relation to which the ISAs my staff to comply with the Financial Reporting (UK) require me to report to you where: Council’s Revised Ethical Standard 2016. I am independent of the House of Commons • the House of Commons Administration’s Administration in accordance with the ethical use of the going concern basis of requirements that are relevant to my audit accounting in the preparation of the and the financial statements in the UK. financial statements is not appropriate; or My staff and I have fulfilled our other ethical • the House of Commons Administration responsibilities in accordance with these has not disclosed in the financial requirements. I believe that the audit evidence statements any identified material I have obtained is sufficient and appropriate uncertainties that may cast significant to provide a basis for my opinion. doubt about the House of Commons Administration’s ability to continue to adopt the going concern basis of Emphasis of matter – material accounting for a period of at least twelve uncertainty regarding property months from the date when the financial valuation statements are authorised for issue.

Without qualifying my opinion, I draw attention to the disclosures in Note 1.3 to the financial Responsibilities of the statements in relation to the valuation Accounting Officer for of the land and buildings held by the House the financial statements of Commons. Properties in use are revalued on an annual basis by an independent valuer As explained more fully in the Statement and included in the financial statements at of Accounting Officer’s Responsibilities, this value. A total valuation of £1,561 million the Accounting Officer is responsible for (excluding leasehold improvements) was the preparation of the financial statements obtained at 31 March 2020. However, the and for being satisfied that they give a true valuation draws attention to the fact that the and fair view. disruption to the UK economy generally and the property market in particular as a result of the COVID-19 pandemic means there is a material uncertainty as to the value of the property at the balance sheet date. Note 1.3 includes details of the potential

Accountability Report | Annual Report and Accounts 2019-20 88 Auditor’s responsibilities for the or in the aggregate, they could reasonably audit of the financial statements be expected to influence the economic decisions of users taken on the basis of these My responsibility is to audit, certify and financial statements. report on the financial statements in accordance ISAs (UK). As part of an audit in accordance with ISAs (UK), I exercise professional judgment and An audit involves obtaining evidence about maintain professional scepticism throughout the amounts and disclosures in the financial the audit. I also: statements sufficient to give reasonable assurance that the financial statements are • identify and assess the risks of material free from material misstatement, whether misstatement of the financial statements, caused by fraud or error. Reasonable whether due to fraud or error, design and assurance is a high level of assurance, but perform audit procedures responsive to is not a guarantee that an audit conducted those risks, and obtain audit evidence in accordance with ISAs (UK) will always that is sufficient and appropriate to detect a material misstatement when it exists. provide a basis for my opinion. The risk Misstatements can arise from fraud or error of not detecting a material misstatement and are considered material if, individually resulting from fraud is higher than for one

Accountability Report | Annual Report and Accounts 2019-20 89 resulting from error, as fraud may involve I communicate with those charged with collusion, forgery, intentional omissions, governance regarding, among other matters, misrepresentations, or the override of the planned scope and timing of the audit internal control. and significant audit findings, including any • obtain an understanding of internal significant deficiencies in internal control that I control relevant to the audit in order identify during my audit. to design audit procedures that are appropriate in the circumstances, but not I am required to obtain evidence sufficient to for the purpose of expressing an opinion on give reasonable assurance that the Statement the effectiveness of the House of Commons of Parliamentary Supply properly presents the Administration’s internal control. outturn against voted Parliamentary control • evaluate the appropriateness of totals and that those totals have not been accounting policies used and the exceeded. The voted Parliamentary control reasonableness of accounting estimates totals are Departmental Expenditure Limits and related disclosures made by equivalent (Resource and Capital), Non- management. Budget (Resource) and Net Cash Requirement. • evaluate the overall presentation, I am also required to obtain evidence structure and content of the financial sufficient to give reasonable assurance that statements, including the disclosures, the expenditure and income recorded in the and whether the financial statements financial statements have been applied to represent the underlying transactions the purposes intended by Parliament and the and events in a manner that achieves fair financial transactions recorded in the financial presentation. statements conform to the authorities which • conclude on the appropriateness of the govern them. House of Commons Administration’s use of the going concern basis of accounting and, based on the audit evidence Other Information obtained, whether a material uncertainty exists related to events or conditions The Accounting Officer is responsible for the that may cast significant doubt on the other information. The other information House of Commons Administration’s comprises information included in the annual ability to continue as a going concern. report, but does not include the parts of If I conclude that a material uncertainty the Accountability Report described in that exists, I am required to draw attention report as having been audited, the financial in my report to the related disclosures statements and my auditor’s report thereon. in the financial statements or, if such My opinion on the financial statements does disclosures are inadequate, to modify not cover the other information and I do not my opinion. My conclusions are based express any form of assurance conclusion on the audit evidence obtained up to the thereon. In connection with my audit of the date of my report. However, future events financial statements, my responsibility is or conditions may cause the House of to read the other information and, in doing Commons Administration to cease to so, consider whether the other information continue as a going concern. is materially inconsistent with the financial statements or my knowledge obtained in the audit or otherwise appears to be materially

Accountability Report | Annual Report and Accounts 2019-20 90 misstated. If, based on the work I have are not in agreement with the accounting performed, I conclude that there is a material records and returns; or misstatement of this other information, I am • I have not received all of the information required to report that fact. I have nothing and explanations I require for my audit; to report in this regard. or • the Governance Statement does not reflect compliance with HM Treasury’s Opinion on other matters guidance.

In my opinion: Report • the parts of the Accountability Report to be audited have been properly I have no observations to make on these prepared in accordance with the financial statements. Financial Reporting Manual as adapted or interpreted for the House of Commons Gareth Davies context; Comptroller and Auditor General • in the light of the knowledge and National Audit Office understanding of the House of Commons 157-197 Buckingham Palace Road Administration and its environment Victoria, obtained in the course of the audit, London, I have not identified any material SW1W 9SP misstatements in the Performance Report or the Accountability Report; and Date: 16 July 2020 • the information given in the Performance and Accountability Reports for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which I report by exception

I have nothing to report in respect of the following matters which I report to you if, in my opinion:

• adequate accounting records have not been kept or returns adequate for my audit have not been received from branches not visited by my staff; or • the financial statements and the parts of the Accountability Report to be audited

Accountability Report | Annual Report and Accounts 2019-20 91 Performance Report | Annual Report and Accounts 2019-20 92 3. Financial Statements

Statement of Comprehensive Net Expenditure 94 Statement of Financial Position 95 Statement of Cash Flows 96 Statement of Changes in Taxpayers’ Equity 97 Notes to the Accounts 98 1. Accounting conventions 98 2. Statement of Net Expenditure by Operating Segment 108 3. Expenditure 112 4. Grants paid 113 5. Income 113 6. Property, plant and equipment 114 7. Heritage assets 118 8. Intangible assets 121 9. Capital and other commitments 122 10. Inventories 124 11. Cash and cash equivalents 124 12. Trade receivables, financial and other assets 125 13. Trade payables and other current liabilities 125 14. Provisions for liabilities and charges 126 15. Contingent liabilities 127 16. Related-party transactions 127 17. Events after the reporting period date 129

Performance Report | Annual Report and Accounts 2019-20 93 Financial Statements Statement of Comprehensive Net Expenditure

For the Year ended to 31 March 2020 which include changes to the values of This account summarises the expenditure non-current assets and other financial and income generated and consumed on instruments that cannot yet be recognised an accruals basis. It also includes other as income or expenditure. comprehensive income and expenditure,

2019-20 2018-19

Note £000 £000

Income from sale of goods & services 5 (18,619) (22,071)

Donated asset income (107,403) –

Total operating income (126,022) (22,071)

Staff costs 3 139,558 125,537

Purchase of goods & services 3 128,406 113,641

Depreciation & Impairment 3 37,154 31,732

Grants 3, 4 3,637 3,698

Other costs/(gain) 3 122,852 11,656

Total Operating expenditure 431,607 286,264

Net operating expenditure for the year 305,585 264,193

Other comprehensive net expenditure

Items which will not be reclassified to net operating expenditure:

– revaluation of Property, Plant and Equipment 2.1 (28,568) 52,665

Comprehensive net expenditure for the year 277,017 316,858

Financial Statements | Annual Report and Accounts 2019-20 94 Financial Statements Statement of Financial Position

As at 31 March 2020 components: assets owned or controlled; This statement presents the financial position liabilities owed to other bodies; and equity, of the House. It comprises three main the remaining value of the entity.

31 March 2020 31 March 2019 Note £000 £000 £000 £000 Non-current assets: Property, plant and equipment 6 1,712,443 1,539,540 Intangible assets 8 411 542 Total non-current assets 1,712,854 1,540,082 Current assets: Inventories 10 691 600 Trade and other receivables 12 19,551 15,428 Cash and cash equivalents 11 12,885 2,991 Total current assets 33,127 19,019 Total assets 1,745,981 1,559,101 Current liabilities Trade and other payables 13 (109,719) (73,024) Total current liabilities (109,719) (73,024) Total assets less current liabilities 1,636,262 1,486,077 Non-current liabilities Provisions 14 (17,605) (5,224) Finance Lease liability 13 – (107,394) Total non-current liabilities (17,605) (112,618) Total assets less liabilities 1,618,657 1,373,459 Taxpayers’ equity and other reserves: General fund 1,168,952 944,641 Revaluation reserve 448,389 427,506 House of Commons Commission reserve 1,316 1,312 Total equity 1,618,657 1,373,459

John Benger Accounting Officer 14 July 2020

Financial Statements | Annual Report and Accounts 2019-20 95 Financial Statements Statement of Cash Flows

For year ended 31 March 2020 service costs and the extent to which these The Statement of Cash Flows shows the changes operations are funded by way of income from in cash and cash equivalents of the House the recipients of services provided by the House. during the reporting period. The statement Investing activities represent the extent to which shows how the House generates and uses cash inflows and outflows have been made for cash and cash equivalents by classifying cash resources which are intended to contribute to flows as operating, investing and financing the Houses’ future public service delivery. Cash activities. The amount of net cash flows arising flows arising from financing activities include from operating activities is a key indicator of Parliamentary Supply and other cash flows.

2019-20 2018-19 Note £000 £000 Cash flows from operating activities Net operating expenditure (305,585) (264,193) Adjustments for non-cash transactions 3 160,006 43,388 (Increase)/Decrease in trade and other receivables 12 (4,123) 303 (Increase)/Decrease in inventories 10 (91) (12) Increase/(Decrease) in trade payables 13 26,805 20,575 Less movements in payables not passing through SCNE 9.2 2,458 (4,334) Use of provisions 14 – (221) Donated Asset 6 (107,403) (11) Net cash outflow from operating activities (227,933) (204,505) Cash flows from investing activities Purchase of property, plant and equipment 6 (294,108) (141,502) Purchase of intangible assets 8 (67) (4) Proceeds of disposal property, plant and equipment 2 Net cash outflow from investing activities (294,175) (141,504) Cash flows from financing activities From the Consolidated Fund (Supply) – current year 531,998 347,311 Interest received on Commission Reserve Balance 4 12 Net financing 532,002 347,323 Net increase/(decrease) in cash and cash equivalents in the period before and after adjustment for receipts and payments to the 9,894 1,314 Consolidated Fund Cash and cash equivalents at the beginning of the period 11 2,991 1,677 Cash and cash equivalents at the end of the period 11 12,885 2,991

Financial Statements | Annual Report and Accounts 2019-20 96 Financial Statements Statement of Changes in Taxpayers’ Equity

For the year ended 31 March 2020 from the provision of services are recorded here. This statement shows the movement in the year The Revaluation Reserve reflects the change on the different reserves held by the House, in asset values that have not been recognised analysed into ‘general fund reserves’ (i.e. those as income or expenditure. Other earmarked reserves that reflect a contribution from the reserves are shown separately where there are Consolidated Fund). Financing and the balance statutory restrictions on their use.

General Revaluation Commission Total Fund Reserve Reserve Reserves Note £000 £000 £000 £000 Balance at 31 March 2018 855,960 486,942 1,300 1,344,202 Net Parliamentary Funding – drawn down 347,311 – – 347,311 Net Parliamentary Funding – deemed 13 377 – – 377 Supply (payable)/receivable adjustment 13 (1,679) – – (1,679) Net Operating Cost (264,193) – – (264,193) Non-Cash Adjustments Non-cash charges – auditor’s remuneration 3 94 – – 94 Movement in Reserves Additions – – 12 12 Recognised in Statement of Comprehensive – (52,665) – (52,665) Expenditure Transfers between reserves 6,771 (6,771) – – Balance at 31 March 2019 944,641 427,506 1,312 1,373,459 Net Parliamentary Funding – drawn down 531,998 – – 531,998 Net Parliamentary Funding – deemed 13 1,679 – – 1,679 Supply (payable)/receivable adjustment 13 (11,569) – – (11,569) Net Operating Cost (305,585) – – (305,585) Non-Cash Adjustments Non-cash charges – auditor’s remuneration 3 103 – – 103 Movement in Reserves Additions – – 4 4 Recognised in Statement of Comprehensive – 28,568 – 28,568 Expenditure Transfers between reserves 7,685 (7,685) – – Balance at 31 March 2020 1,168,952 448,389 1,316 1,618,657

Financial Statements | Annual Report and Accounts 2019-20 97 Financial Statements Notes to the Accounts

1. Accounting conventions 1.2 Relationship with the House of Lords The House of Commons and the House of 1.1 Accounting policies Lords hold joint stewardship of the Palace of These financial statements have been prepared Westminster. Responsibility for maintenance in accordance with the Financial Reporting of the Palace and the remaining parts of the Manual (FReM) as adapted or interpreted for Parliamentary Estate is shared between the the House of Commons context which applies Strategic Estates Team and the Parliamentary International Financial Reporting Standards Maintenance Services Team which is part of (IFRS). Where the FReM permits a choice of In-House Services. General estates accounting policy, the policy which is judged expenditure, individual maintenance and to be the most appropriate to give a true building projects including the Curators Office and fair view has been selected. The policies are shared between the House of Commons adopted by the House of Commons are (60%) and the House of Lords (40%) and described below. They have been applied recharged accordingly, or solely allocated consistently in dealing with items that are to the House of Commons or House of Lords. considered material to the accounts. Other shared costs are split at agreed ratios for that service. In addition to the primary statements prepared under IFRS, the FReM also requires The Parliamentary Archives are a shared the House to prepare an additional primary facility, operated on behalf of both Houses by statement. The Statement of Parliamentary the House of Lords. The costs of the Archives Supply and supporting Notes show outturn are split between the House of Commons against Estimate in terms of the net resource (40%) and House of Lords (60%). requirement and the net cash requirement. The Parliamentary Procurement and These accounts have been prepared on the Commercial Service (PPCS) is a shared service, accruals basis under the historical cost operated on behalf of both Houses by the accounting convention modified to account House of Lords. The cost of PPCS is split for the revaluation of property. The accruals between the House of Commons (70%) and the basis of accounting means reporting income House of Lords (30%). and expenditure when it is incurred rather than when it is received or paid. Other non-current Arrangements for security are agreed jointly by assets are not generally re-valued unless the the authorities of both Houses of Parliament adjustments are material. with the Metropolitan Police. These costs are

Financial Statements | Annual Report and Accounts 2019-20 98 monitored jointly by the authorities in the either due to their design, configuration, size two Houses but are billed individually to the or nature and are rarely sold in the market. House of Commons and House of Lords in When producing a DRC valuation, the general a pre-determined ratio (70:30 from 2018- assumption is that the replacement cost 19). The cost of the Parliamentary Security is calculated using ‘a modern equivalent’, Department is also shared on the same ratio. where the replacement asset provides the same service potential but in a contemporary The management of the ICT services for setting. However, there are situations where both Houses has been centralised within the only way that a replacement asset could the Parliamentary Digital Service (PDS) provide the same service potential would be (formerly Parliamentary Information and to reproduce the actual building. Public Sector Communications Technology (PICT) service). Accounting Standard 17 (IPSAS 17) provides PICT (now PDS) formally became a joint an example of a parliamentary building that department of both Houses on 1 April 2008 would be reproduced (rather than replaced) under the terms of the Parliament (Joint because of its significance to the community. Departments) Act 2007. Each House pays for The Palace of Westminster is a Grade One its own ICT hardware with the costs of shared listed building and forms part of a UNESCO services being split between the House of World Heritage Site; therefore it is appropriate Commons (70%) and House of Lords (30%). for it to be valued on the basis of it being rebuilt ‘as is’. 1.3 Property, plant and equipment In accordance with International Accounting One component of the replacement cost Standards (IAS 16), non-specialised property calculation is the inflationary increase applied assets (excluding the Palace of Westminster year on year to the cost of build – this is and special adaptations of Portcullis House) the Tender Price Index (TPI). There is also a are valued at current value in existing use location factor for the London Borough of (EUV) using a method determined by the Westminster. These indices are estimates Valuation Office Agency (VOA). The Palace and are therefore subject to fluctuations, of Westminster (including the Visitor Reception for example, a one point movement in the Building) and special adaptations of Portcullis TPI would have approximately £11 million House are valued at depreciated replacement impact on the DRC valuation of the Palace of cost due to their specialised nature. All Westminster as a whole. The Valuation Office property is subject to a full professional Agency provide a draft valuation in the Autumn valuation at least every five years. Annual preceding the year end using the forecast interim reviews are undertaken to ensure that TPI and location indices. The Valuation Office asset values remain in line with their fair value. Agency then monitor these indices throughout the remainder of the year and notify the House Revaluation losses are taken first to reserves of significant fluctuations, say over 3% for both and then to the Statement of Comprehensive Houses to review and assess the impact. Net Expenditure for any loss in excess of previous revaluation gains. The VAT position of the House is complex and there are no comparators for the total (i) Depreciated Replacement Cost rebuild of an asset of such unique and historic Depreciated replacement cost (DRC) is used importance. The most prudent decision based for specialised properties which are unique, on current HMRC guidelines to government

Financial Statements | Annual Report and Accounts 2019-20 99 departments at 31 March 2018 is that the perhaps not the best fit to meet the needs of valuation would include VAT. The assumption the 21st century. will be kept under review to reflect any future changes or clarifications. The total amount The extent to which the value of the Palace of VAT recognised within the valuation is is reduced is an Accounting Estimate and estimated to be around £165 million (House of determined jointly, by both Houses of Commons only). The original assessment and Parliament. It looks at a range of factors such the assumption used to value the Palace of as the site and location of the Palace, the Westminster were created a significant time flow of supplies throughout the building and ago and the use of the Palace has changed how energy efficient it is. The main changes considerably since that original assessment impacting the revised functional obsolescence and the condition of the building continues factor are a change in relation to the aspect to deteriorate. Whilst the House is content relating to maintenance and its increased that the assumptions remain reliable and has relevance, and the reduced but still high score been assured that the valuation represents given to the importance of policy and how the the depreciated replacement cost, and two Houses of Parliament interact and operate. that COVID-19 has not impacted the value A change in the Functional Obsolescence factor at this point, there remains an element of 1% will reduce the net book value of the of uncertainty within the figures provided Palace by approximately £7.3 million (House of by the Valuation Office Agency, which this Commons only). year was a desk top based review and they have provided a statement to the House During 2018-19, management of both Houses on material uncertainty. The House is also reviewed the Functional Obsolescence factor closely monitoring the guidance from the applied to the Palace and amended it from Royal Institute of Chartered Surveyors and any 8.25% to 13.3%. The rate of 13.3% remained in movements in the building cost indices, as 2019-20. this may impact the depreciated replacement cost of the Palace (and elements of Portcullis (iii) Freehold properties House). It is thus right that the House seeks Title to freehold land and buildings is held as further and fuller assurance on the values follows: presented and will invite the Valuation Office Agency to undertake a fuller, on-site • The Palace of Westminster by the assessment when practical to do so. Sovereign. • Property on the House of Commons (ii) Functional Obsolescence part of the Parliamentary Estate by Functional Obsolescence represents a the Corporate Officer of the House of reduction in the carrying value of an asset Commons (the Clerk of the House). due to an outdated design feature that cannot easily be changed. The Palace of Westminster The whole of the Parliamentary Estate was re- was designed in the mid-19th century to valued in full by the VOA as at 31 March 2018. provide the functional requirements needed at the time and also incorporated surviving (iv) Long leasehold medieval buildings on the site, so it is not A property, 102 Rochester Row, is held on a surprising that the design of the Palace is long leasehold and valued at fair value by the VOA.

Financial Statements | Annual Report and Accounts 2019-20 100 (v) Investment properties Catering equipment and vehicles are not re- The House of Commons holds interests in valued on the grounds of not being material. land and buildings which are classified as investment properties with the rental income (viii) Equipment being negotiated at arm’s length. All contracts In accordance with IAS 16 computers, are treated on an operating lease basis. These contemporary furniture and other equipment properties are the car park at Abingdon Street, are recognised at depreciated historic cost 10 and 11 Bridge Street, and Units A, B and C in due to short life and/or low value. Although Portcullis House. Investment properties in 49 the capitalisation threshold is £1,000, certain and 50 Parliament Street were subsumed into ICT equipment (including desktop computers, 53 Parliament Street during the refurbishment monitors and printers below the threshold) of that building. are considered to be grouped assets and therefore are capitalised. In accordance with IAS 40 investment property is valued at fair value and not depreciated. A (ix) Assets under construction (AuC) full VOA valuation is carried out at least every Assets under construction are items that have five years, with an annual interim review to yet to be completed and are not in operation ensure that asset values are in line with their at the end of the financial year (the House has fair value. yet to receive the future economic benefits of the asset). These items are valued at cost in There is a restriction on Abingdon Street the accounts. All AuC items are reviewed every car park. Its use is restricted to that of an year and those which are available for use underground car park with public garden at by financial year end are reclassified to the ground level. relevant asset group.

(vi) Short, leasehold tenant improvements (x) Material Uncertainty The House of Commons has a number of short, As at the valuation date, the Valuation Office leasehold properties and undertakes tenant Agency has advised on material uncertainty improvement works. These are capitalised at within their reported figures due to the on- cost and depreciated over the remaining life going COVID-19 pandemic. They have reported of the lease. The VOA does not include these in that they have attached less weight to previous their annual valuation. market evidence for comparison purposes to inform opinions of value. They further advise (vii) Plant and machinery that the current response to COVID-19 means Plant and machinery includes the Great that they are faced with an unprecedented Clock mechanism and In-House Services’ set of circumstances on which to base their catering equipment and vehicles. The Great judgment. The valuations are therefore Clock was previously valued using appropriate reported on the basis of ‘material valuation indices at 31 March 2006. The cost of valuing uncertainty’ as per UK Valuation Technical and the Great Clock outweighs the benefit provided, Performance. therefore there are no plans to re-value it.

Financial Statements | Annual Report and Accounts 2019-20 101 Standard 3 and UK Valuation Practice 1.4 Donated assets Guidance Application 10 of the Royal Institute Donated assets are capitalised at fair value of Chartered Surveyors Red Book Global.22 with the credit entry made to income. Consequently, less certainty and a higher degree of caution should be attached to their Donated assets currently comprise works of art valuation than would normally be the case. and are not subject to a depreciation charge Given the unknown future impact that COVID-19 in line with House policy on works of art. The might have on the real estate market, they freehold of Richmond House was transferred to recommend that the House keeps the valuation the House of Commons on 5 September 2019 at of these properties under frequent review, a value of £107,400,000, which was originally which the House agrees with. treated as a finance lease. At this date the finance lease liability was fully written down (see note 9.2) and the finance lease asset was disposed of at a loss of £3,432,000 (see note 3 and 6 for further details).

22 https://www.rics.org/uk/upholding-professional-standards/sector-standards/valuation/red-book/red- book-global/

Financial Statements | Annual Report and Accounts 2019-20 102 1.5 Heritage Assets (b) Parliamentary Art Collection The FReM requires organisations to provide The Parliamentary Art Collection is the additional information, within the financial national collection of art relating to the statements, of any heritage assets held by history of Parliament. It contains portraits of them as at the year end. The standard defines parliamentarians and parliamentary events, Heritage Assets as: past and present, wall paintings, sculpture, mosaics and textiles, oil paintings, works ‘A tangible asset with historical, artistic, of art on paper and political memorabilia scientific, technological, geophysical or (including suffrage memorabilia) within the environmental qualities that is held and Houses of Parliament. There is also a collection maintained principally for its contribution of coins and medals with associations to to knowledge and culture.’ former parliamentarians and members of parliamentary staff. In total the collection has Each category of heritage asset held by circa 9,000 objects. the House of Commons, along with their applicable accounting policy which is detailed For valuation purposes, the Parliamentary Art below. Further information regarding asset Collection is divided into two categories; those management policies can be found in Note 7. objects held as at 31 March 2000 and those objects acquired since that date. No valuation (a) Historic furniture and House of Commons for the Collection at 31 March 2000 is currently state silver included on the Statement of Financial Position The House’s collection of historic furniture because obtaining a valuation for a collection and state silver is reported in the Statement of this size and diversity would be costly. of Financial Position at market value. The During 2012-13, it was determined that the furniture collection consists mainly of historical benefit received by a valuation exercise at this furniture, silver, clocks and ceramics. Due to time would not justify the expense incurred. the importance of these collections, all assets This continues to be the position of the House have been capitalised regardless of their which is in line with the FReM. individual value. Acquisitions since 1 April 2000 have either been A valuation of the collections was carried out made by purchase or donation. Purchases are by Bonhams and completed in March 2016. recorded at cost and donations are recorded at current value ascertained by the House’s It is the House’s policy to maintain its collection Curator of Works of Art with reference, where of historic furniture and state silver in full appropriate, to the commercial art market. working order and maintenance costs are charged to the Statement of Comprehensive The House’s duty of care responsibilities for Net Expenditure when incurred. Both the the Parliamentary Art Collection are carried historic furniture collection and the state out by the Curator’s Office, with the cost of silver are deemed to have indeterminate lives conservation etc charged to the Statement and as such the House does not consider it of Comprehensive Net Expenditure. The appropriate to charge depreciation. individual works of art in the Collection are deemed to have indeterminate lives and as such the House does not therefore consider it appropriate to charge depreciation.

Financial Statements | Annual Report and Accounts 2019-20 103 (c) Antiquarian books The value of the Speaker’s state coach is Almost all the House of Commons Library’s not currently valued on cost benefit and books were acquired after the 1834 fire in practicality grounds. It is not therefore shown the Palace of Westminster, when most of the in the Statement of Financial Position. earlier stock was lost. During the second half of the 19th century, there was a deliberate (e) Archives policy of acquiring books that would have been • (i) Broadcasting found in a country house library of that period. The broadcasting archive originated As a result, the Library acquired through a in audio and video tape recording mixture of purchase, gifts and legacies a wide- formats and includes coverage from ranging collection of books, including some the Chambers in both Houses and that are now of considerable antiquarian or also Committees selected by the scholarly interest. broadcasters. Audio dates from 1978 and the House of Commons video collection The House of Commons antiquarian book dates from 1989 with come House of collection was moved to the British Museum Lords material dating back to 1985. in June 2003 when the restoration of the In November 2015 the Broadcast Unit King’s Library was finished. The House Library switched from tape to server recording has retained at Westminster any books with and in 2017 Parliament began the process parliamentary connections or which might be of digitising the video tapes in order to needed for its normal services for Members. All preserve the content stored on the ageing the books that have been moved to the British video tapes. Audio tapes will continue to Museum remain in the Library’s catalogue and be held in storage. can be used at Westminster if required. They The archive is valuable in an historical also appear in the central library catalogue of sense but is difficult to value in practice. the British museum, who are responsible for High quality recordings are made freely routine conservation, and are available under available as duplicated copies to anyone supervision for public use in the Museum. who orders it with a small fee applied to cover the costs of transfer. Content The antiquarian books held by the British dating back to 2007 can be downloaded Museum are not valued in line with the practice without charge via parliamentlive.tv. adopted for the Parliamentary Art Collection. Consequently, the value for this archive As such they are not shown in the Statement of is not included on the Statement of Financial Position. Financial Position.

(d) The Speaker’s state coach • (ii) Parliamentary Archives The Speaker’s state coach is a 17th century The Parliamentary Archives comprise c.4 gilded and painted carriage. Following a million items that have been preserved programme of conservation and repair in at the Palace of Westminster from 1497 2007-08, it was loaned to the National Trust to date in a variety of formats from for public display at the Carriage Museum at parchment and paper to born-digital Arlington Court in Devon. As part of the loan and digitised records. Parliamentary agreement, the National Trust indemnifies the records prior to 1497 form part of the coach for an indemnity value of £1.6 million. National Archives. Most of the records

Financial Statements | Annual Report and Accounts 2019-20 104 are unique and have been preserved for The Estate Archive consists of Strategic their historical, legal and administrative Estates’ permanent records such as plans importance, consequently it is not and drawings which are not recognised in the deemed cost effective or useful to obtain Statement of Financial Position because cost a value. information is not readily available and the The Parliamentary Archives were benefit of obtaining valuations would not be established within the House of Lords cost effective. Nearly all the items are thought in 1946. The administration costs of this to have nominal financial value and no item is service have been shared with the House worth more than £1,000. of Commons since 1999. Any operational assets held by the Parliamentary Archives 1.6 Depreciation are disclosed within the House of Lords Depreciation is charged to expenditure on the Resource Accounts. The Parliamentary historic value or, for buildings, the re-valued Archives publishes an Annual Report amount of assets. For buildings, that element which is available via www.parliament. of the depreciation which relates to the uk. Full details of the Parliamentary increase in valuation in prior years is charged Archives acquisition policy are also to the Revaluation Reserve. This amount available at this web address. is realised by transferring the Revaluation Reserve to the General Fund over the remaining (f) Ceremonial items useful life of the asset. Land assets are not The House’s collection of ceremonial items depreciated. consists of four swords used by the Speaker’s Office. Depreciation is charged on a straight-line basis. The period over which to depreciate The value of the ceremonial items is not property assets is advised by the Valuation currently included on the Statement of Office Agency. The rates adopted are Financial Position as it is not deemed practical calculated to write off the valuation of to do so. freehold buildings, plant, equipment and intangible assets by equal instalments (g) Architectural salvage and estate over their estimated useful lives, with the archives exception of heritage assets (i.e. historic The architectural salvage collection consists furniture, state silver and the Parliamentary of examples of architectural fragments from Art Collection with an estimated life of more the Parliamentary Estate such as pieces of than 200 years). Heritage assets are not decorative stonework and wood carving. Many depreciated because the long remaining life of these pieces have been retained to provide a or high residual value of the asset makes record of the craftsmanship used in the Palace any such charge immaterial. Capital works and Estate buildings throughout their life. Cost on leasehold property are depreciated on a information is not readily available and the straight-line basis over the lease period. The benefit of obtaining valuations would not justify capitalised costs for assets in the course of the cost, therefore it has not been recognised construction are not depreciated until the in the Statement of Financial Position. assets are brought into use.

Financial Statements | Annual Report and Accounts 2019-20 105 For accounting purposes, the lives of the 1.8 Inventories property, plant and equipment and intangible Inventories are valued as follows: assets such as software licences are in the following ranges: • Finished goods and goods for resale are valued at cost or, where materially different at current replacement cost, Property: Years and at net realisable value only when they either cannot or will not be used. not Land • Work in progress is valued at the lower of applicable cost, including appropriate overheads, Palace of Westminster 69 and net realisable value.

Freehold property (excluding 1.9 Impairment 11-37 Portcullis House) The House of Commons reviews its assets for impairments on a case by case basis and Portcullis House 43 accounts for any adjustments in accordance Leasehold property 2-29 with the FReM.

Plant and equipment: Years 1.10 Current investments The House of Commons holds short term Furniture – standard 10 current investments. These are all held in cash and are included in the ‘Bank and Cash Plant & machinery 5-40 in Hand’ figures. Interest receivable on the Fixtures and fittings – standard 10 House of Commons Commission Reserve is credited to that reserve. Any other interest General office equipment 3-5 received is treated as operating income.

IT equipment including telephony 3-5 IFRS 9 – Financial Instruments brings together all three phases of the financial instruments Broadcasting equipment 10 project: Classification and Measurement; Intangible assets 3-5 Impairment, and Hedge Accounting. There are no changes to these accounts relating to this Heritage Items: Years standard.

Historic furniture and Works of Art Indefinite 1.11 Operating income Operating income relates directly to the operating activities of the House of Commons 1.7 Intangible assets and includes, refreshments, retail and visitor Intangible non-current assets are primarily ticket sales, videos, fees from filming, private software licences and other ICT enhancements bill fees, and royalties. provided by third parties costing in excess of £1,000. These are capitalised and amortised IFRS 15, Revenue from Contracts with over the expected useful life of the asset. Customers establishes the principles that should be complied with when recognising income using a five-step model to review

Financial Statements | Annual Report and Accounts 2019-20 106 contracts and identifying the separate of the contract under what is referred to as performance obligations. As the majority of a compensation event. The nature of these income received by the House of Commons is compensation events will determine whether in connection with retail sales (i.e. catering they are accounted for as trade payables or and tours), income is recognised at the time provisions and contingent liabilities. the service or goods are provided, therefore the impact on these accounts of IFRS 15 is not 1.15 Provisions and contingent liabilities material. In accordance with IAS 37, provisions are recognised when there is a present obligation Fees and charges are set in accordance (legal or constructive) as a result of a past with the House of Commons policy which is event, it is probable that the obligation will be published via https://www.parliament.uk/ settled and a reliable estimate can be made of documents/commons-finance-office/Financial- the amount of the obligation. Policies/Fees-and-Charges-policy.pdf Contingent liabilities are also disclosed in 1.12 Foreign exchange accordance with IAS 37 and are similar to Transactions which are denominated in foreign provisions, but where there is less certainty currency are translated into sterling at the about the obligation to settle or the amount exchange rate ruling on the date of each cannot be reliably measured. transaction. Where the time value of money is material, 1.13 Leases contingent liabilities which are required to be In accordance with IAS 17, leases are disclosed under IAS 37 are stated at discounted capitalised only when substantially all risks amounts. and rewards of ownership are transferred to the lessee. In addition, the House discloses for parliamentary reporting and accountability 1.14 Trade payables and other current purposes certain contingent liabilities where liabilities the likelihood of a transfer of economic Trade payables are measured at the benefit is remote. These remote contingent transaction amount. Accruals for work liabilities are stated at the estimated current completed on projects in the Strategic Estates amounts. work programme are calculated on the basis of an estimate of the proportion of the 1.16 VAT and Corporation Tax project that has been completed. The work Irrecoverable VAT is charged to the relevant of independent quantity surveyors is used to expenditure category or included in the inform the estimate. capitalised purchase cost of fixed assets. Where output tax is charged, or input VAT is The House has adopted a New Engineering recoverable, the amounts are stated net of VAT. Contract (NEC3) suite of contracts which will enable a more collaborative approach to works The House is not subject to Corporation Tax. contracts. One of the features of NEC3 and key differences will be the ability to resolve issues as they arise rather than at the end

Financial Statements | Annual Report and Accounts 2019-20 107 1.17 Impending application of newly 2. Statement of Net Expenditure issued accounting standards not yet by Operating Segment effective IFRS 16 – Leases, will be effective for reporting Each of the House of Commons Teams periods beginning after 1 January 2021. The (or segments) report their resource spend standard introduces a single lessee accounting separately on a monthly basis to the Commons model irrespective of the type of lease in Executive Board. Total assets and net assets operation. HM Treasury has issued guidance are managed and controlled at a corporate on the implementation of this accounting level. standard which the House of Commons intend to adopt. The work of each Team is described briefly below. Based on current information, when the standard is adopted in 2021-22, the general Chamber and Committees (CCT): provides fund opening balance in the Statement of secretariat, advice, procedural, reporting and Financial Position would be adjusted by other services that support the work of the approximately £11.2 million and the Statement Chamber and committees, and supports the of Consolidated Net Expenditure will receive House’s international relations. a charge of approximately £1.6 million. IFRS 17- Insurance contracts, will be effective for In-House Services (IHS): provides the reporting periods after 1 January 2023 which accommodation, logistics, catering, retail, replaces IFRS 4. The standard applies to issued estate and asset management, environmental insurance contracts and reporting these in the management, fire safety, business continuity financial statements to provide comparability and other facilities required by the House. and increase transparency. It is expected there will be no impact to the 2023-24 accounts. Strategic Estates (SE): brings together all teams delivering capital investment along 1.18 Segmental Reporting with supporting property, planning and design The analysis provided in Note 2 meets the teams. reporting requirement of International Financial Reporting Standard, Operating Finance Portfolio and Performance & HR Segments (IFRS 8). and Diversity (FPP/HR&D): Formerly known as Corporate Services (CS), responsible for 1.19 House of Commons Commission corporate strategy and planning. It develops Reserve HR and finance policies to support internal Under the powers provided by the House customers across the House, organisational of Commons (Administration) Act 1978 as development and monitoring of performance. amended by the Government Resources and Accounts Act 2000, the House of Commons Participation (PAR): seeks to engage the Commission has established a reserve for any public in the work Parliament does. It provides excess income generated. Agreement of the educational and visitor tours and retail Commission is required before any sums can be services. drawn down.

Financial Statements | Annual Report and Accounts 2019-20 108 Research and Information (R&I): informs the Administration Committees and other domestic work of the House and its Members. committees. It also supports the Commons Executive Board and the Director General. Parliamentary Digital Services (PDS): a joint department with the House of Lords which Office of the Speaker (SPK): is responsible provides information and communications for supporting all aspects of the Speaker’s technology services to both Houses of duties, which include the Chamber, honours Parliament, including the funding set aside for and awards and representative matters. investment on ICT related programmes and Staff in the Speaker’s Office, help organise projects. the Speaker’s meetings, talks and visits to public groups, schools and colleges across Parliamentary Security Department (PSD): the UK. is responsible for the strategy, planning and overall delivery of security across the Parliamentary Estate. The Director chairs the Parliamentary Security Board.

Central Provision (CP): covers other centrally held funds.

Shadow Sponsor Body (SSB): is responsible for the business case and scope of the restoration programme for the Palace of Westminster. Legislation is required for the Sponsor Body to be established as a stand-alone organisation, which is the reason it has been set up in shadow form.

In addition to the Teams listed above there are a number of smaller offices, which for the purpose of this report are merged into one segment:

Governance Central Services (GCS): supports the Clerk of the House of Commons in his roles as Accounting Officer and Corporate Officer, and provides assurance to him through risk management, health and safety reporting and internal audit. It also promotes the work of the House Service to Members’ staff and is responsible for House-wide corporate communications and media engagement. It includes the secretariats for the House of Commons Commission, the Finance and

Financial Statements | Annual Report and Accounts 2019-20 109 Total Total £000 £000 (22,071) 431,607 286,264 305,585 264,193 (126,022) 1,745,981 1,636,262 1,559,101 1,486,077 – – SSB SSB 332 332 £000 £000 2,814 2,814 – – CP CP £000 £000 3,661 3,661 14,586 14,586 PSD PSD (118) (118) £000 £000 36,777 35,704 36,659 35,586 (7) (41) £000 £000 6,686 5,417 6,679 5,376 GCS/SPK GCS/SPK GCS/SPK (64) PDS PDS (151) £000 £000 39,031 36,525 38,967 36,374 (9) R&I R&I (20) £000 £000 14,105 13,010 14,096 12,990 PAR PAR £000 £000 9,109 6,296 5,188 (4,057) (3,921) 10,353 CS (25) (30) £000 £000 12,703 12,673 14,464 14,439 FPP/ HR&D FPP/ SE SE £000 £000 (5,304) 84,670 90,052 79,366 200,782 (110,730) IHS IHS £000 £000 52,090 47,130 41,267 34,869 (10,823) (12,261) CCT CCT (189) (225) £000 £000 38,003 39,919 39,730 37,778 2019-20 2018-19 Gross Gross Expenditure Gross Expenditure Income Income Net Expenditure Net Expenditure Total assets Total Net assets assets Total Net assets

Financial Statements | Annual Report and Accounts 2019-20 110 2.1. Reconciliation between Operating 2019-20 2018-19 Segments and Statement of £000 £000 Comprehensive Net Expenditure The revaluation of the Parliamentary Estate Total net expenditure during the financial year resulted in a net loss reported for operating 305,585 264,193 of £78,230,000 reflecting an improvement segments in the property market and changes to the Net (gain)/loss on tender price index and location factor used revaluation of Property, (28,568) 52,665 for interim valuations. The net revaluation loss Plant and Equipment of £78,230,000 has been allocated between the Revaluation Reserve (Gain: £28,568,000) Total net expenditure and the Statement of Comprehensive Net per Statement of 277,017 316,858 Expenditure (loss: £106,798,000). Comprehensive Net Expenditure

Financial Statements | Annual Report and Accounts 2019-20 111 3. Expenditure 2019-20 2018-19 Note £000 £000 £000 £000 Grants 4 3,637 3,698 Goods and services Accommodation services 38,593 36,301 Security 24,342 23,822 Computer maintenance 17,240 11,589 Finance and specialist services 6,720 7,520 Communications 5,470 5,270 Catering and other supplies 4,402 4,569 Other staff costs 4,105 4,036 Travel and subsistence 2,729 3,166 Information 2,251 2,134 Broadcasting 1,282 1,463 Office supplies 1,382 978 108,516 100,848 Rentals under operating leases Buildings rental 19,266 12,232 Other rental 624 553 19,890 12,785 Service Concessionary Arrangements Service charge element of Finance Lease – 8 Non-cash items Depreciation 6 36,254 29,663 Amortisation 8 220 248 Impairment 6 680 1,821 (Profit)/loss on disposal of property, plant & equipment 6 138 38 Net (gain)/loss on revaluation of property, plant and 2.1 106,798 11,134 equipment Loss on Finance lease23 3,432 – Auditors’ remuneration and expenses24 103 94 Provisions 14 12,381 390 160,006 43,388 Sub total 292,049 160,727 Staff Costs25 139,558 125,537 Grand Total 431,607 286,264

23 The difference between carrying value of Finance Lease asset and Finance lease creditor (£113.3m less £109.9 million)

24 Auditors have received no remuneration for non-audit work

25 See Accountability Report, page 70 for details of staff costs

Financial Statements | Annual Report and Accounts 2019-20 112 4. Grants paid

2019-20 2018-19 £000 £000

Commonwealth Parliamentary Association (UK Branch) 1,322 1,286

History of Parliament Trust 1,197 1,173

Inter Parliamentary Union (British Group) 844 929

British Irish Parliamentary Assembly 93 109

British American Parliamentary Group 83 81

Association of Former Members of Parliament 13 13

Other parliamentary (various) 85 107

3,637 3,698

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

5. Income

2019-20 2018-19 £000 £000

Receipts from sales 14,092 15,251

Rental receipts and associated charges 997 957

Other receipts 3,529 5,851

Fees on private bills 1 1

18,619 22,060

Donated Assets (see note 1.4 for details) 107,403 11

126,022 22,071

Financial Statements | Annual Report and Accounts 2019-20 113

– – – (22) (680) Total £000 27,156 36.254 (10,475) 105,386 294,108 107,403 2,644,113 (123,897) 1,712,443 1,539,540 1,235,738 1,104,573 2,948,181

– – – – – – – – – – – – £000 81,211 66,340 98,311 81,211 98,311 (49,240) construction Assets underAssets

– – – – – – 818 (680) £000 4,271 3,901 38,764 (6,897) (6,759) 12,107 12,477 23,799 26,287 35,906 Technology Information

– – – – – – – – – 710 388 9,321 £000 1,527 7,186 5,981 4,050 3,340 11,236 Plant and Plant Machinery

– – – – – – – – – – 323 4,142 £000 1,011 2,378 1,690 2,775 2,452 5,153 Fittings Furniture & Furniture

– – – – – – – – – – – – 3 63 £000 25,622 25,688 25,622 25,688 Heritage Assets Heritage

– – – – – – – – – (54) 317 (398) £000 17,275 2,797 2,534 14,080 14,741 16,877 Dwellings

– – – – £000 (3,716) 30,633 33,032 64,300 46,873 (60,840) 105,440 181,578 Buildings 2,204,959 1,267,585 1,134,999 1,202,317 1,069,960 2,469,902 – – – – – – – – – – Land £000 (5,478) 40,827 43,100 262,819 (56,160) 285,108 262,819 285,108

27

26 28 Includes a transfer of asset from the DHSC of Richmond House for £107,400,000 and 3 donations totalling £2,600 received from B Jenkinson for from £2,600 and 3 donations totalling received the DHSC of Richmond House for £107,400,000 of asset from a transfer Includes Artist period. the Election from sketches Cann Bust and A Dant- A Dufont-DU Bear, of L.W portrait Agency. Office FRICS of Valuation Seabrook, Marc 2020 by in March valued were Land and Buildings title. of Legal the Richmond House transfer to relates under buildings Disposals of £3.7m Carrying amount Carrying 2020 at 31 March Disposals Carrying amount Carrying 2019 at 31 March Transfer of Estimate Transfer At 31 March 2020 At 31 March Charge in the year Charge Reclassifications Revaluations Donations Depreciation Depreciation 2019 at 1 April Impairments Reclassifications Additions At 31 March 2020 At 31 March Disposals 1Impairments Cost or valuation or valuation Cost 2019 As at 1 April Revaluation 26 27 28 6. Property, plant and equipment plant 6. Property, 2019-20

Financial Statements | Annual Report and Accounts 2019-20 114

– – (6) 11 Total £000 (1,269) (1,827) (1,229) 29,663 (99,281) 141,502 (163,080) 2,668,776 1,493,350 1,539,540 1,104,573 2,644,113 1,175,426

– – – – – – – – – – – £000 (2,873) 50,651 33,433 33,433 81,211 81,211 construction Assets underAssets

– – – – – (11) 706 £000 5,477 3,656 9,999 (1,258) (1,220) 33,850 12,477 26,287 38,764 23,851 Technology Information

– – – – (6) (9) (11) 665 726 (348) £000 2,167 6,848 5,981 3,340 4,219 9,321 2,629 Plant and Plant Machinery

– – – – – – – – – 474 261 £000 3,668 1,690 2,452 1,477 4,142 2,191 Fittings Furniture & Furniture

– – – – – – – – – – – 11 22 £000 25,589 25,622 25,589 25,622 Heritage Assets Heritage

– – – – – – – – (6) 318 (297) £000 2,534 2,222 17,572 14,741 15,350 17,275 Dwellings

– – – – – – £000 (1,468) 84,213 24,702 (99,275) (179,965) Buildings 2,302,179 1,134,999 1,069,960 1,157,646 2,204,959 1,144,533 – – – – – – – – – – – – Land £000 17,182 245,637 262,819 245,637 262,819

30

29 A donation of £11,250 from the Speakers Art Fund was made towards the purchase of a portrait of Lucy, Countess Baldwin of Bewdley, by De by Lazlo. of Bewdley, Baldwin Countess of Lucy, of a portrait the purchase was made towards Art Fund the Speakers A donation of £11,250 from Agency. Office FRICS of Valuation Seabrook, Marc 2019 by in March valued were Land and Buildings Disposals Impairments Reclassifications Cost or valuation As or valuation Cost 2018 at 1 April Additions Transfer of asset/ Transfer Donations Carrying amount at Carrying 2019 31 March At 31 March 2019 At 31 March amount at Carrying 2018 31 March 1Impairments Reclassifications Revaluations Revaluation 2019 At 31 March Depreciation 2018 at 1 April in the year Charge Disposals 2018-19 comparator figures comparator 2018-19 Richmond House was included in Land and Buildings as a finance lease. The carrying value for the asset was £114,258,000 (Land £56,160,000, (Land £56,160,000, for the asset lease.was The carrying value £114,258,000 as a finance Richmond House wasin Land and Buildings included £58,098,000). Building 29 30

Financial Statements | Annual Report and Accounts 2019-20 115 Land and Buildings analysed by Net Book Value Analysed by individual land, buildings and investment property

31 March 2020 Land Buildings Investment Total £000 £000 £000 £000 Palace of Westminster31 85,200 764,503 – 849,703 Portcullis House 50,404 303,933 – 354,337 Richmond House 53,510 53,510 – 107,020 Norman Shaw North 18,930 14,280 – 33,210 1 Parliament Street 13,815 10,854 – 24,669 Norman Shaw South 9,275 8,225 – 17,500 1 Derby Gate 8,962 7,531 – 16,493 1 Canon Row 8,101 10,739 – 18,840 49-53 Parliament Street 2,981 4,471 – 7,452 Visitors Reception building – 9,679 – 9,679 Improvements to leasehold buildings* – 5,757 – 5,757 Education centre – 3,343 – 3,343 3 Parliament Street 2,336 1,990 – 4,326 2 Parliament Street 1,882 1,667 – 3,549 4 Canon Row 1,150 1,150 – 2,300 2 Canon Row 1,175 965 – 2,140 102 Rochester Row 360 405 – 765 22 John Islip Street 770 230 – 1,000 21 Dartmouth Street 33,930 53,070 – 87,000 Abingdon St Car Park – – 5,430 5,430 Units A, B & C Portcullis House – – 5,910 5,910 10 Bridge Street – – 5,200 5,200 11 Bridge Street – – 1,150 1,150 Net Book Value at 31 March 2020 292,781 1,256,302 17,690 1,566,773 * Improvements to leasehold buildings are not valued by the Valuation Office Agency (VOA)

31 The total value of the Palace at 31 March 2020 was £1,416,171,870 (House of Commons’ share £849,703,120)

Financial Statements | Annual Report and Accounts 2019-20 116 31 March 2019 Land Buildings Investment Total £000 £000 £000 £000 Palace of Westminster 89,400 692,374 – 781,774 Portcullis House 51,808 293,593 – 345,401 Richmond House 56,160 58,098 – 114,258 Norman Shaw North 20,434 16,055 – 36,489 1 Parliament Street 14,609 11,952 – 26,561 Norman Shaw South 10,000 9,230 – 19,230 1 Derby Gate 9,488 7,531 – 17,019 1 Canon Row 7,860 6,360 – 14,220 49 -53 Parliament Street 3,061 4,787 – 7,848 Visitors Reception building – 8,982 – 8,982 Improvements to leasehold buildings* – 4,564 – 4,564 Education centre – 3,686 – 3,686 3 Parliament Street 2,438 2,162 – 4,600 2 Parliament Street 1,950 1,800 – 3,750 4 Canon Row 1,176 1,224 – 2,400 2 Canon Row 1,237 1,057 – 2,294 102 Rochester Row 380 445 – 825 22 John Islip Street 663 209 – 872 Abingdon St Car Park – – 5,167 5,167 Units A, B & C Portcullis House – – 7,110 7,110 10 Bridge Street – – 4,100 4,100 11 Bridge Street – – 1,410 1,410 Net Book Value at 31 March 2019 270,664 1,124,109 17,787 1,412,560

Financial Statements | Annual Report and Accounts 2019-20 117 7. Heritage assets Many of the items are in continual use throughout the Estate. Those items in storage 7.1 Historic furniture and House are either held on-site or by a third party in of Commons state silver secured off-site storage facilities. The collection consists of: The House’s detailed management, House of Shared with preservation, disposal and access policy Commons House of Lords have been approved by the Parliamentary Estates Forum. Subject to the approval of the Number of Number items of items House, the Head of Collection (Furniture and Decorative Arts) may dispose of items from Clocks 98 6 the collection, although this will only happen in exceptional circumstances and will be in Silver 67 – (non-State silver) accordance with the Museum Association’s disposal policy.32 The vast majority of items in Furniture 3,639 1,782 the collection were acquired over 40 years ago. Other 198 10 Note 6 includes the value of the historic 4,002 1,798 furniture (£15,573,970) plus House of Commons state silver (£2,612,120). House of Commons 1,098 – State Silver

5,100 1,798

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

2019-20 2018-19 2017-18 2016-17 2015-16

£000 £000 £000 £000 £000

At 1 April 16,280 16,280 16,280 16,280 16,267

Additions – – – – 13

At 31 March 16,280 16,280 16,280 16,280 16,280

32 http://www.museumsassociation.org/collections/disposal-toolkit-and-training

Financial Statements | Annual Report and Accounts 2019-20 118 7.2 Parliamentary Art Collection The collection comprises the following The Collection has circa 9,000 works of art, categories: over 80% of which are on display throughout the buildings of the Parliamentary Estate at Purchased Donated prior any one time. The earliest pieces date from prior to 31 to 31 March the medieval age, with major holdings dating March 2000 2000 from the 18th, 19th and 20th centuries, and significant contemporary holdings also. Number of Number items of items Although historically this is a single collection of art for the Palace of Westminster, in 1992 Paintings & prints 4,796 1,534 the Parliamentary Art Collection was divided between the two Houses, with each House Busts 170 49 assuming ownership responsibilities for its Medieval statuary 6 – share. Murals & mosaics 122 17

Tapestries 9 1

5,103 1,601

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

2019-20 2018-19 2017-18 2016-17 2015-16

£000 £000 £000 £000 £000

At 1 April 7,405 7,372 7,305 7,214 7,118

Additions 63 22 67 76 71

Donations 3 11 – 15 25

At 31 March 7,471 7,405 7,372 7,305 7,214

Financial Statements | Annual Report and Accounts 2019-20 119 The Parliamentary Art Collection is managed The House’s disposal policy for the by the Curator’s Office, which is responsible Parliamentary Art Collection was approved for all aspects of its management, care, during 2012-13. conservation, documentation, presentation and interpretation in accordance with the policies 7.3 Medals that are approved by the Speaker’s Advisory The Parliamentary Art Collection also includes Committee Works of Art. Further details, a medal collection. The collection consists including examples of some of the artwork, can of awards instituted by the British Crown and be found on the ‘Art in Parliament’ website at issued to the armed forces over the last two www.parliament.uk/art. centuries as well as medals for gallantry awarded to civilians. The Advisory Committee seeks to acquire works of art for the House of Commons Collection A total of 546 medals are recorded in the which fall into one or more of the following collection on public display in the Medals categories: Corridor in the House of Commons where it can be viewed. • Portraiture • Parliamentary history 7.4 Ceremonial items • Political satire The House’s collection of ceremonial items • Political commemoratives consists of the Mace, Swords and Medallions. • The United Kingdom and Parliament today Not all the items are owned by the House; many are owned by the Crown and are returned to St An active loans policy is pursued, with works James Palace for safekeeping when Parliament of art acquired on loan to fill gaps in the is dissolved: Collection. Loans are from both public bodies and private individuals. Loans will not be • The Mace is on loan from the Royal accepted from bodies or individuals which Household. The House bears the cost of would be seen to compromise the integrity of repairing any damage to the Mace while the House, and therefore the identity of each it is in our care. lender must be made known in advance of the • The Speaker’s Office own four ceremonial loan proceeding. swords and maintenance costs are charged to the Statement of Comprehensive Net The House of Commons will not acquire, Expenditure when incurred. whether by purchase, gift, bequest or transfer, • There are forty-two medallions which any work of art or object unless the Works of are worn by the Doorkeepers during Art Committee is satisfied that the Collection parliamentary term time. Like the Mace, can acquire a valid title to the item in question, these are not owned by the House but and that in particular it has not been acquired are on loan from the Royal Household, in, or exported from, its country of origin (or hence their value is not included in the any intermediate country in which it may Statement of Financial Position. The have been legally owned) in violation of that House is responsible for the maintenance country’s laws. of the medallions and costs are charged to the Statement of Comprehensive Net Expenditure when incurred.

Financial Statements | Annual Report and Accounts 2019-20 120 8. Intangible assets

The House’s intangible assets comprise software licences and intellectual property rights.

Trademarks & Artistic Software Licences Originals Total £000 £000 £000 Cost or valuation At 1 April 2019 3,021 16 3,037 Additions 67 – 67 Disposals – – – Reclassifications 22 – 22 At 31 March 2020 3,110 16 3,126 Amortisation At 1 April 2019 2,491 4 2,495 Charged in year 219 1 220 Disposals – – – Reclassifications – – – At 31 March 2020 2,710 5 2,715 Carrying amount at 31 March 2019 530 12 542 Carrying amount at 31 March 2020 400 11 411

Trademarks & Artistic Software Licences Originals Total £000 £000 £000 Cost or valuation At 1 April 2018 3,017 16 3,033 Additions 4 – 4 Disposals – – – Reclassifications – – – At 31 March 2019 3,021 16 3,037 Amortisation At 1 April 2018 2,244 3 2,247 Charged in year 247 1 248 Disposals – – – Reclassifications – – – At 31 March 2019 2,491 4 2,495 Carrying amount at 31 March 2018 773 13 786 Carrying amount at 31 March 2019 530 12 542

Financial Statements | Annual Report and Accounts 2019-20 121 9. Capital and other commitments 9.2 Finance Leases Finance Lease liability 9.1 Commitments under leases During 2017-18, the House agreed a lease with – Operating leases the then Department of Communities and Local Total future minimum lease payments based Government for Richmond House covering the on current operating lease agreements are period from the date of occupation, 12 January given in the table below for each of the 2018, to August 2019 at a peppercorn rent. The following periods. transaction was treated as a finance lease. During 2019-20, the property was transferred to 2019-20 2018-19 the House for no consideration and the finance £000 £000 lease was written down in full.

Obligations under operating leases 2019-20 2018-19 comprise: £000 £000

Buildings Finance lease creditor 111,729 116,062

Not later than one year 17,170 12,055 Write down in year (1,876) (4,334) Finance lease creditor Later than one year and (109,853) 40,872 31,969 write down not later than five years – 111,728 Later than five years 94,023 64,152 Creditor falling due – 4,334 Total 152,065 108,176 within 1 year

Creditor falling after due Other – 107,394 after 1 year Not later than one year 330 330

Later than one year and – 330 9.3 Capital commitments not later than five years

Later than five years – – 2019-20 2018-19 £000 £000 Total 330 660 Contracted capital commitments at 31 March not otherwise included in 67,711 56,009 these financial statements for property, plant and equipment.33

33 Majority of these capital commitments relate to the Northern Estate Programme.

Financial Statements | Annual Report and Accounts 2019-20 122 9.4 Financial instruments Interest rate risk As the cash requirements of the House are All of the House’s financial assets and liabilities met through the Estimates process, financial carry fixed or nil rates of interest. The House instruments play a more limited role in creating is not therefore exposed to significant interest and managing risk than would apply to a non- rate risk. public sector body of a similar size. The majority of financial instruments relate to contracts Foreign currency risk for non-financial items in line with the House’s Foreign currency would not usually form part of expected purchase and usage requirements and the House’s assets or liabilities and as such it is the House is therefore exposed to little credit, not exposed to any significant exchange risks. liquidity or market risk. Fair values Liquidity risk The fair values of the House primary financial The House of Commons is financed by resources assets and liabilities as at 31 March 2020 are the voted annually by Parliament. As such it is not same as the book values shown in the Statement exposed to significant liquidity risks. of Financial Position.

Financial Statements | Annual Report and Accounts 2019-20 123 10. Inventories

2019-20 2018-19 £000 £000

Retail 317 365

Catering 135 34

Store equipment 202 166

Other 37 35

691 600

11. Cash and cash equivalents

2019-20 2018-19 £000 £000

Balance at 1 April 2,991 1,677

Net change in cash and cash equivalent balances 9,894 1,314

Balance at 31 March 12,885 2,991

The following balances at 31 March were held at:

Government Banking Service 10,924 1,044

Commercial banks and cash in hand 645 635

House of Commons Commission Reserve account (see note 1,316 1,312 1.28)

Balance at 31 March 12,885 2,991

Financial Statements | Annual Report and Accounts 2019-20 124 12. Trade receivables, financial and other assets

2019-20 2018-19 £000 £000 Amounts falling due within one year: Trade receivables 9,591 8,089 Deposits and advances 677 716 VAT and other taxes 952 1,002 Prepayments and accrued income 8,111 5,056 19,331 14,863 Amounts falling due after more than one year: Prepayments and accrued income 220 565 19,551 15,428

13. Trade payables and other current liabilities

2019-20 2018-19 £000 £000 Amounts falling due within one year: Other taxation and social security 3,437 3,123 Trade payables 7,379 2,933 Other payables 9,796 6,336 Accruals and deferred income 77,538 54,619 Current part of imputed finance lease element of on-balance – 4,334 sheet (SoFP) service concession arrangements 98,150 71,345 Amounts issued from the Consolidated Fund for supply but 11,569 1,679 not spent at year end 109,719 73,024 Amounts due to be paid after one year* – 107,394

* The figure of £107.4 million for ‘amounts due to be paid after one year’ was the accounting impact of the finance lease for Richmond House in 2018-19

Financial Statements | Annual Report and Accounts 2019-20 125 14. Provisions for liabilities and charges

Legal Claims Dilapidation & Other Costs Departures Total £000 £000 £000 £000

Balance at 1 April 2018 202 4,818 35 5,055

Provided in the year 39 351 – 390

Provisions not required written back – – – –

Provisions utilised in the year (186) – (35) (221)

Borrowing costs (unwinding of – – – – discounts)

Balance at 31 March 2019 55 5,169 – 5,224

Provided in the year 37 12,344 – 12,381

Provisions not required written back – – – –

Provisions utilised in the year – – – –

Borrowing costs (unwinding of – – – – discounts)

Balance at 31 March 2020 92 17,513 – 17,605

Legal claims Dilapidation costs Provision has been made for various legal This reflects the legal obligation of the House, claims against the House of Commons. This in accordance with the terms of the lease reflects all known claims where legal advice agreement of four leasehold properties, to indicates that it is more than 50% likely that the provide for re-instatement and dilapidations. claim will be successful, and the amount of the claim can be reliably estimated. Departures This relates to departures through the Voluntary Legal claims which may succeed but are less Exit Scheme. likely to do so or cannot be estimated reliably are disclosed as contingent liabilities in Note 15.

Financial Statements | Annual Report and Accounts 2019-20 126 15. Contingent liabilities

The House of Commons has the following contingent liabilities:

Increase in year Obligation 1 April 2019 £000 expired in year 31 March 2020

Personal injuries 29 33 (29) 33 and employee claims

16. Related-party transactions Parliamentary Archives, Parliamentary Digital Service, and certain education and outreach As Members of Parliament, any related party activities. transactions of Commission Members should be recorded in the Register of Members’ Interests. These joint arrangements are charged between the two Houses on an agreed percentage basis J Benger, the Clerk of the House and M Ahmed, of underlying costs for each service (certain Managing Director of Finance (from 1 May) accommodation and overhead costs are were Trustees of the Speaker’s Art Fund during excluded). Each House includes its share of the 2019-20, which receives a donation in lieu relevant asset base and/or service cost in their of commission on sales from the House of Annual Accounts. Commons (Participation).

M Eddolls has a close relationship with an Executive Coaching services supplier, Spark. The value of the contract is in the region of £10,000.

S Davies by virtue of her position as Clerk Assistant, is a Trustee of the History of Parliament Trust, which receives a grant from the House of Commons.

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

The House of Lords and the House of Commons share some buildings and services. These include the Palace of Westminster, together with services provided by Strategic Estates and Parliamentary Maintenance Services,

Financial Statements | Annual Report and Accounts 2019-20 127 The major shared services, excluding minor shared services, are recharged on the following basis:

House of Commons House of Lords

Communications services, POST 70% 30%

Visitor Tours 70% 30%

Accommodation and Works services (including 60% 40% Curator’s Office)

Broadcasting services 60% 40%

Parliamentary Archives 40% 60%

Parliamentary Security Department 70% 30%

Parliamentary Procurement and Commercial Service 70% 30%

The House of Commons incurred expenditure The British-Irish Parliamentary Assembly (BIPA) of £119,597,000 (2018-19: £101,526,000) on is provided with accounting services and behalf of the House of Lords during 2019-20. accommodation. The House made payments The balance as at 31 March 2020 relating to of £116,612 on behalf of the BIPA in 2019-20. accommodation, works and other shared At the year end, the balance due from BIPA services owed to the House of Commons by in respect of 2019-20 expenditure was £0. the House of Lords was £6,450,000 (2018-19: Accommodation is also provided to the British £3,361,000). American Parliamentary Group (who are also given accounting support at the year-end), The House of Lords incurred expenditure of Commonwealth Parliamentary Association £1,914,000 (2018-19: £1,657,000) on behalf of the (UK Branch) and the British Group of the Inter- House of Commons during 2019-20. The balance Parliamentary Union. as at 31 March 2020 owed to the House of Lords by the House of Commons was £ 433,000 (2018- 19: £319,000).

The Parliamentary Digital Service manages the ICT for both Houses. Each House pays for its own IT hardware, with the costs of shared services being split on an agreed 70:30 ratio (Commons: Lords).

Financial Statements | Annual Report and Accounts 2019-20 128 17. Events after the reporting period date

In accordance with the requirements of IAS 10, post Statement of Financial Position events are considered up to the date on which the accounts are authorised for issue by the Accounting Officer. This is the date of the Certificate and Report of the Comptroller and Auditor General.

There are two events that occurred after 31 March 2020 that require disclosure:

• On 19 May 2020 the Sponsor Body commissioned a review of the Programme. Whilst they have made it clear that the works to the Palace are essential, there may be new opportunities to delivering the programme in a different way. The review will report to the Sponsor Body Board in the Autumn and the House will consider that accounting impact at this point, as well as any consequential impacts on the Northern Estate Programme.

• The COVID-19 pandemic has had a significant impact on revenue generating activities and has caused additional costs the House did not expect to incur. As set out in the Accountability Report, steps have been taken by the House to reprioritise its resources and excesses that cannot be met will have to be funded from a Supplementary Estimate.

Financial Statements | Annual Report and Accounts 2019-20 129 Performance Report | Annual Report and Accounts 2019-20 130 4. Annual Report of the Administration Estimate Audit and Risk Assurance Committee

Introduction 132 Conclusion for the financial year 2019-20 132 Appendix 136 Membership 138 Meetings 138 Internal Audit 139 Internal audits considered by the Committee 139 Risk Management 140 Internal audit charter 140 Planning of the audit programme 140 External Auditors 141 House of Lords Audit Committee 141 Members Estimate Audit Committee 141 Further information about the Committee 141

Performance Report | Annual Report and Accounts 2019-20 131 Annual Report of the Administration Estimate Audit and Risk Assurance Committee

Introduction Main Conclusion 4. During the financial year 2019-2020 a 1. This is the twentieth annual report of number of events took place that impacted the House of Commons Administration on the activities of the House of Commons. Estimate Audit and Risk Assurance This included two prorogations, a general Committee (AEARAC), which was election and the outbreak of the COVID-19 established by the House of Commons pandemic, all of which have affected the Commission on 15 May 2000. work and activities of the House Service. The COVID-19 outbreak, which began in 2. This report outlines the AEARAC’s the UK towards the end of the financial conclusions in relation to the Administration year, had a particularly significant impact. Estimate for the financial year 2019-20. As it did everywhere, COVID-19 affected The Committee’s findings are set out the health and wellbeing of staff, and by reference to the key areas on which prioritising their safety was central to it is required to provide assurance to the House Service response. As a result the Accounting Officer under its terms of the constraints on movement caused of reference. by the pandemic the House Service were tasked with developing a hybrid operating 3. Details of the AEARAC’s terms of reference, model for the House of Commons, membership and activity during the year which included capacity for remote and are provided in the Appendix to this report. physical participation in the Chamber, remote voting and remote meetings of Select Committees. This was achieved by Conclusion for the financial House staff in a matter of weeks and is a year 2019-20 testament to their professionalism and dedication. The Audit Committee is aware The effectiveness of the system of governance, that additional costs relating to the set- risk management and internal control up of the hybrid operating model were (the “system of internal control”) incurred but that these will be reported in the next financial year. The COVID-19

Administration Estimate Audit and Risk Assurance Committee | Annual Report and Accounts 2019-20 132 outbreak also meant that the Audit actions in the GDPR audit at their Autumn Committee’s last meeting of the year was 2020 meeting. The GDPR audit presents delayed until May 2020. The Committee mixed result, as whilst information is has been actively engaged in assessing managed well centrally, compliance at the risk register and this has included a team level is inconsistent. We remain considering new risks resulting from the concerned generally at the length of COVID-19 pandemic. time it takes managers to implement audit actions which is documented in the 5. During the financial year Parliament Head of Internal Audit’s opinion and we prepared for the handover of the will be working with the Internal Audit Restoration and Renewal (R&R) programme team and the Commons Executive Board to the Sponsor Body on 8th April 2020. to drive those changes. We are however Whilst the financial accountability for encouraged by the progress made by some the R&R programme now lies with the teams, such as Strategic Estates, who have Sponsor Body, and subsequently falls made good progress in closing off their under the remit of the Sponsor Body’s Audit outstanding audit actions. We consider Committee, there are a number of risks it essential to the assurance process that which continue to either be held or shared audit actions are owned and acted on by Parliament. We will continue to monitor efficiently and effectively by the relevant those risks closely with our colleagues on management teams. the House of Lords Audit Committee and the Sponsor Body Audit Committee. Supporting evidence 7. The Audit Committee has worked closely 6. The Head of Internal Audit’s overall opinion with the Internal Audit team throughout on the House’s framework of governance, the year and we are content with the level risk management and control for 2019-20 of cooperation and collaboration. The is a moderate opinion. This means that 2019-20 annual audit plan has provided the management, control and governance a useful tool to help ensure that audits processes in place are generally adequate cover a broad range of functions within for the purposes of the House of Commons the House Service and they can confidently but some improvements are required to be used to provide assurance to the enhance the adequacy and effectiveness Accounting Officer. We have continued to of the framework. We concur with this work with the Head of Internal Audit to set view. From the audits undertaken this year the plan for next year to consolidate this there are some areas that raise concerns approach to audit planning. At the July and these will be a priority for the Audit 2019 meeting of the Audit Committee, the Committee going forward. As a default Committee tasked the Head of Internal position internal audits that receive a Audit to consider options for developing limited or unsatisfactory opinion will an assurance mapping tool to help teams be examined more closely by the Audit assess their level of assurance around Committee to ensure that actions are risk management controls. Options were taken to improve the opinion to moderate presented in the January 2020 meeting and in the quickest possible timeframe. In this will be rolled out and implemented in line with this the Audit Committee will the coming financial year. consider progress against management

Administration Estimate Audit and Risk Assurance Committee | Annual Report and Accounts 2019-20 133 8. This year the House of Commons internal considering these risks formally in the audit team issued two audits with Joint Audit Committee. The Committee Substantial opinions, eleven audits with has also started inviting Board members Moderate opinions, and one audit with and senior management representatives a Limited opinion. One audit report is to attend the Audit Committee to give an currently undisclosed but it is likely to opportunity for the Committee to have a report as unsatisfactory. One bicameral detailed discussion about different areas audit (conducted under the Lords Internal of work. They heard from Tracey Jessup, Audit team or with third party auditors Chief Information Officer and Managing BDO) received a Substantial opinion, six Director of the Parliamentary Digital bicameral audits received a Moderate Service, in January 2020. opinion, and one audit a Limited opinion. We acknowledge and commend the The integrity of the Annual Accounts Internal Audit team for the significant 10. We have reviewed the Annual Accounts. increase in the number of audits conducted this year and are content that these 11. We consider the Accounts acceptable reports provide a reasonable basis for signature by the Accounting Officer. for a Moderate opinion. We are satisfied with the Annual Governance Statement and the process 9. In addition to the internal audit reports, undertaken to produce it. the Committee has considered other issues it has identified during the course of the The work of the internal audit service year. This has included an assessment 12. We note that Internal Audit met its target of the financial delegation guidelines. for completion of the audit plan during The Audit Committee is concerned the period. The Internal Audit team was that there is not enough clarity on the recruited and fully at capacity by April authorisation limits and has asked the 2018. They have now benefitted from Finance Director to review these and being fully resourced during the year report back to the Committee in the next and have deepened their understanding financial year. In its role as a member of the broader organisation and overall of the Joint Audit Committee with the state of Governance, Risk Management House of Lords Audit Committee, the and Control (GRC). We agreed that Audit Committee assessed the risks of as there were no significant changes the handover of the R&R programme impacting the integrity of the risk to the Sponsor Body. That process of management systems during the financial assessment fed into the development of year that a further audit on these systems the Parliamentary Relationship Agreement in 2019-20 was not necessary. We will which is the document that sets out the expect that it will be timely to conduct working relationship between the Houses a further audit in the coming financial year. of Parliament and the Sponsor Body. The Chair of the Audit Committee met 13. We also welcome the continued close with the Chair of the House of Lords Audit cooperation by Internal Audit with its Committee and the Chair of the Sponsor colleagues in the House of Lords. Body Audit Committee to discuss possible risks that might arise, in addition to

Administration Estimate Audit and Risk Assurance Committee | Annual Report and Accounts 2019-20 134 14. Overall we are satisfied that the scope and nature of the work of Internal Audit and in parallel with the work of the NAO as the external auditors, adequately underpins the assessment of the Accounting Officer of the system of internal control.

The external audit by the external auditor 15. We are satisfied with the scope and nature of the work of the Comptroller and Auditor General (C&AG) and believe that the C&AG has carried out its external audit work with due independence. We are satisfied that there are no material unadjusted misstatements to report. The external auditors did not highlight any substantive weaknesses in financial control.

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

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

Other matters as were referred to the Committee by either the Accounting Officer or the Commission 18. No other matters were referred to the Committee by the Accounting Officer or the Commission in 2019-20.

Administration Estimate Audit and Risk Assurance Committee | Annual Report and Accounts 2019-20 135 Appendix

Terms of reference 1. The Committee has the following terms of reference, which are approved by the House of Commons Commission (the last changes were agreed in March 2017). In January 2020 the House of Commons Commission agreed to increase the number of MP members on the Administration Estimate Audit and Risk Assurance Committee by one and this is reflected below:

Remit Objectives The Administration Estimate Audit and Risk The Committee supports the Accounting Officer Assurance Committee pursues its objectives in discharging his responsibilities under the and fulfils its responsibilities on behalf of the Administration Estimate, particularly with Commission and, as it deems appropriate, regard to the maintenance of an effective shall draw any matters arising within these system of internal control. The Committee terms of reference to the attention of the also provides assurance to the Accounting Commission. Officer and the Commission that risk is being managed effectively by the organisation. Membership The Committee’s objective is to give assurance The membership of the Committee shall be: to the Accounting Officer on:

• 4 MP members, including: • The effectiveness of the system of – A Member of the House of Commons governance, risk management and Commission internal control (referred to collectively – A Member of the Finance Committee as the “system of internal control”) • 3 external Members, appointed by the • The integrity of the Annual Accounts Commission • The work of the internal audit service • The external audit by the external auditor The Chairman shall be appointed by the • Other matters as may be referred to Commission from amongst the external it by either the Accounting Officer or members of the Committee. the Commission

Quorum Responsibilities The quorum of the Committee shall be 3, Governance, Risk Management and Internal including 1 MP and 1 external member. Control The Committee is responsible for reviewing governance, risk management and internal control (“the system of internal control”). This reviewing will include:

• The effectiveness of the design and operation of the system of internal control

Administration Estimate Audit and Risk Assurance Committee | Annual Report and Accounts 2019-20 136 • The development and operation of • Agreement to the annual internal audit the system of risk management, plan and monitoring of progress in accordance with the overall risk • Consideration of the results and findings management policy from internal audit work and the • The level and range of assurances on the adequacy of management responses management of risks • Consideration of the Director of Internal • The adequacy and implementation of Audit’s annual report and opinion proposed management actions to improve the effectiveness of internal controls External Audit The Committee is responsible for monitoring Annual Accounts and reviewing the work of the external audit. The Committee is responsible for reviewing the This review to include: Annual Accounts before their submission to the Accounting Officer. This review to include: • Recommendations on the appointment and scope of work of the external auditor • any significant changes in the accounting • Consideration of the external audit policies or treatments strategy • major financial reporting judgments • The results of the external audit work, or estimates including any reports to those charged • consistency of the Annual Governance with responsibilities for governance, and Statement the adequacy of management responses • resolution of any matters raised by • Representations made by management the external auditor to the external auditor • significant adjustments resulting from • Annual review of the external auditor’s the audit by the external auditor independence and effectiveness

Internal Audit The Committee is responsible for monitoring the work of the internal audit service. This includes:

• Involvement in the appointment of the Director of Internal Audit and the audit partner

Administration Estimate Audit and Risk Assurance Committee | Annual Report and Accounts 2019-20 137 Membership Meetings

2. The Committee is chaired by an external 5. The Committee met formally three times member, who is also an external member in the financial year 2019-20: on 1 May 2019, of the House of Commons Commission. 1 July 2019, and 15 January 2020. Dr Rima Makarem has chaired the The November 2019 meeting was cancelled Committee since 1 October 2018. Jane due to the dissolution of Parliament McCall and Robert Scruton are the other ahead of the General Election. The March two external members of the Committee. 2020 meeting was delayed until May due The MP members of the Committee until to COVID-19 outbreak. In addition the November 2019 were Sir Paul Beresford MP, Committee met jointly with the House Mr Clive Betts MP, and Rt Hon Tom Brake of Lords Audit Committee on 27 June 2019 MP. Following the general election the MP and 6 February 2020. members of Committee are Mr Clive Betts MP, Sir Charles Walker MP (appointed May 2020), and Harriett Baldwin MP (appointed Total number May 2020). There is currently one MP of meetings position vacant on the Audit Committee. Member attended The Membership of the Members Estimate Dr Rima Makarem (Chair, 3/3 Audit Committee (MEAC) is the same October 2018 onwards) as that of the AEARAC. Sir Paul Beresford MP 3/3 3. The Clerk of the House, The Director General of the House of Commons, the Director Mr Clive Betts MP 1/3 of Finance, the Head of Internal Audit and officials from the National Audit Office also attend the Committee’s meetings. These The Rt Hon Tom Brake MP 2/2 officials may withdraw for specific items at the Committee’s, or their own, request. Jane McCall 3/3

4. The Committee’s Secretary is the Private Robert Scruton 3/3 Secretary to the Clerk of the House.

6. The external members of the Committee held informal meetings with the House’s finance team and the NAO to discuss the draft House of Commons Administration Estimate Annual Report and Accounts on 15 June 2020.

Administration Estimate Audit and Risk Assurance Committee | Annual Report and Accounts 2019-20 138 Internal Audit Internal audits considered by the Committee 7. The Committee routinely receives an oral report at its meetings from the Head 11. During 2019-20 the House of Commons of Internal Audit and Risk Management, Internal Audit team undertook 15 audits together with a paper showing progress relating to the Administration Estimate. against the annual work programme, This was an increase of 6 audits compared summaries of the main conclusions from with the previous year. Audit reports are completed audit assignments and the usually considered first by the external balance between core audit and the other members of the Committee, who may work undertaken by Internal Audit. choose to bring matters to the attention of the full Committee. 8. The Internal Audit team is comprised of Dr Richard Stammers, Head of Internal 12. Audits discussed by the Committee dealt Audit and Risk Management, the lead with a wide range of topics, covering: internal auditor, an internal auditor and an audit trainee. a. The efficient and effective management of teams such as the Chamber and 9. All qualified staff maintained their Committee team (CCT) continuing professional development in the b. Cyber security issues and information year. The Internal Audit team updated their management risks self-assessment against their professional c. Business Continuity Planning standards and confirmed that a series d. The tracking of management closure of continuous improvements were being of internal audit actions, in relation addressed. to areas such as the Parliamentary Maintenance Services team 10. RSM were engaged in February 2019 to conduct an audit of risk management. RSM’s The Committee also followed-up report gave a Moderate level of assurance, implementation of agreed management indicating that significant progress had actions. We were particularly pleased been made in this area. There have been with the progress made in closing all no significant changes impacting the actions in Strategic Estates, a previous integrity of the risk management systems area of concern. during the financial year, and a decision was made not to trigger an audit by RSM in 13. Internal Audit tracks the actions arising 2019-20. Reliance can still be based on the from its reports. The number of significant February 2019 RSM report, which supports a or fundamental actions that have been Moderate opinion. completed or are outstanding are reported to the Committee. In addition, the actions that are outstanding are specifically brought to the attention of the Committee, with a commentary on why they remain outstanding.

Administration Estimate Audit and Risk Assurance Committee | Annual Report and Accounts 2019-20 139 14. Further information on specific audits is Internal audit charter included in the minutes of the Committee’s meetings which are available on the 17. The Internal Audit service works to the Committee’s website. Public Sector Internal Audit Standards professional framework. The House’s internal audit charter sets out the purpose, Risk Management role, responsibility, status and authority of internal auditing within the House of 15. The Committee continued to fulfil its Commons and outlining the scope of responsibility to review the development internal audit work. This charter was revised and operation of the system of risk in April 2016 and agreed by the Committee. management, in accordance with the overall risk management policy, and the level and range of assurances on the Planning of the audit programme management of risks. 18. The Committee agreed the Internal Audit 16. The Committee provides formal assurance programme for 2019-20 in May 2019. There to the Commission and the Accounting was one change to the plan where it was Officer that risks are being effectively decided to delay an audit of bullying and managed by the organisation and harassment to allow procedures and monitored by the Commons Executive processes time to be established. This was Board. The Commons Executive Board has replaced with an audit into the cash office. day to day responsibility for managing risk. There was a further change as the planned

Administration Estimate Audit and Risk Assurance Committee | Annual Report and Accounts 2019-20 140 audit of the ways of working programme the accounts were discussed by the full couldn’t take place as the programme Committee on 8 July 2020 prior to being closed early in the financial year. An audit signed off by the Clerk of the House, of the Moves programme happened in as Accounting Officer. its place. The Change audit and the R&R preparation audits were merged as they covered the same scope. House of Lords Audit Committee

23. The Committee held a joint meeting with the External Auditors House of Lords Audit Committee on 27 June 2019 and 6 February 2020. The Joint Audit 19. The National Audit Office (NAO) has Committee has focused on the transfer of continued to provide an external audit the R&R programme to the Sponsor Body function for the House of Commons. and considered the implementation of NAO staff routinely attend meetings of the Category A programmes and standalone Committee and receive all of its papers and projects. minutes, although the Committee continues from time to time to discuss certain items of business without auditors present. Members Estimate Audit Committee 20. The NAO have raised concerns about the valuation of the Parliamentary Estate and 24. A Members Estimate Audit Committee the basis on which that valuation took place was established by the House’s Members in 2008 as the accompanying paperwork is Estimate Committee on 14 June 2004. It has not available. The NAO have used external the same membership as the AEARAC and property experts to provide an interim meets at the same time as the AEARAC. assessment on the valuation but will seek to The annual report of the Members Estimate do a full valuation in the next financial year. Audit Committee will be published with the House of Commons: Members Estimate 21. In January 2020 the Committee discussed Accounts 2019-20. the NAO’s planned approach to auditing the House of Commons Administration Estimate Annual Report and Accounts 2019-20. The Further information about valuation of the Parliamentary Estate on the Committee the balance sheet remains a risk that is of concern to the NAO and they also confirmed 25. The two Audit Committees publish annual that due to R&R and new leases being reports and certain papers (agendas, signed IFRS 16 (new leases standard) would minutes and actions arising) on their page be a priority for 2020-21. on the parliamentary website http://www. parliament.uk/business/committees/ 22. The external members of the Committee committees-a-z/other-committees/ met with the NAO and the Finance staff on estimate-audit-committees/. 15 June 2020 to discuss the draft House of Commons: Administration Estimate Accounts for 2019-20. Following this

Administration Estimate Audit and Risk Assurance Committee | Annual Report and Accounts 2019-20 141