Annual Report and Accounts 2017–18

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Annual Report and Accounts 2017– 18

The HOUSE of COMMONS: Administration

Annual Report and Accounts 2017–18

(for the year ended 31 March 2018)

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 23 July 2018

Published by Authority of the House of Commons HC 1381 © Parliamentary Copyright House of Commons 2018

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

. Performance Report 01 p6

Accountability Report 02. p44

Financial Statements 03. p88

Annual Report of the Administration Estimate Audit . and Risk Assurance Committee 04 p120 Annual Report and Accounts 2017–18 Performance Report

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0 1 Performance Report

Overview 8 Performance Analysis 18 © UK Parliament/Mark Duffy

Annual Report and Accounts 2017–18 Performance Report

8 Performance Report Overview

Foreword by the Clerk of the House The new Parliament had just begun when there was an attempted cyber-attack on our computer network. On The past 12 months have been particularly challenging 23 June 2017, the Digital Service discovered unusual for the House Service. During this time, several of the activity and closer investigation confirmed that hackers risks we had identified have materialised. We have were carrying out a sustained and determined cyber- addressed the consequences and sought to learn attack in an attempt to identify weak passwords and lessons from these events. This should help us to gain access to users emails. Significantly fewer than 1% mitigate risks in future and to better prepare ourselves of the 9,000 accounts on the parliamentary network to deal with handling similar incidents. I am delighted were compromised as a result of weak passwords. but not surprised that staff responded so effectively, This successful defence from a cyber-attack has been and that our overall level of performance has been enabled by the actions taken in the past few years maintained but there is still room for improvement in within the Cyber Security Programme. An independent the way we deliver our services. review reported positively that Parliament’s cyber On 22 March 2017, Westminster was the target security capability had significantly improved compared of a terrorist attack which resulted in the death of with three years before. The review also identified some five members of the public, and of PC Keith Palmer areas for improvement. within the . On that day, and the In the autumn, following a number of allegations of days that followed, staff across the House Service bullying and harassment, including sexual harassment, showed their professionalism, calmness and courage. concerning Members and Members’ staff, the cross- Following the attack, the Speakers of the two Houses party Working Group on an Independent Complaints commissioned an external independent review of how and Grievance Policy was established to tackle the perimeter of the Parliamentary Estate is secured these issues. In February the House endorsed the and protected. The recommendations of the review are recommendations of the Working Group, since when being implemented, with many being achieved through work which includes the establishment of a Behaviour a Security Programme which has been prioritised. In Code for Parliament, an independent complaints and addition, the operation during and after the attack of grievance scheme to underpin the Code, and a system Parliament’s Incident Management Framework was of training to support the Code, has been ongoing and externally reviewed and action has been taken to is reporting regularly to a steering group of Members. implement the recommendations. The House of Commons Commission established an The announcement of a snap General Election in April Independent Inquiry into the bullying of House staff, 2017 came as a surprise, and managing the impact of following the testimony on the BBC’s Newsnight the election, with little preparation or planning time, programme of some of our own serving or retired staff. was a substantial challenge. This challenge was met by I am determined that we will learn from where things all parts of the House Service, who responded to it with have gone wrong in the past to make the House a enthusiasm, working together to deliver a good start workplace that is free of bullying and harassment, and to the new Parliament for new and returning Members where all are treated with dignity and respect. alike. In particular, the New Members’ Reception Area, I am naturally disappointed that for the seventh which operated in the first week after the election, successive year, the Head of Internal Audit has only demonstrated what can be achieved by colleagues been able to offer a limited opinion in relation to the across the House working together to deliver the best level of assurance. This is due to the acknowledged possible service to our Members. All staff involved continuing weaknesses in the governance, risk in delivering the post-election service, in whatever management, and control framework, which impairs capacity, should be rightly proud of their achievements. Performance Report Annual Report and Accounts 2017–18

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The past 12 months have been particularly challenging for the House Service ... Thanks to the efforts of staff ... our overall level of performance has been maintained. our effectiveness and has understandably led to this opinion. I note that this year it was a marginal decision that resulted in a limited opinion, which recognises that there are signs of improvement. However, more progress has to be made, and all staff are striving to make the cultural changes we have asked of them. As these embed in the coming year, our aim is to achieve a moderate opinion next year. The events I have described above have attracted a lot of attention over the past year, but it is important to reiterate that, thanks to the efforts of staff, often in challenging circumstances, business as usual activity has continued and the House’s decision-making processes have operated effectively. New and returning Members have been able to set up their offices and perform their duties, and throughout the year, Members have been ably supported in their role by the existing services of the House. The focus of House business this year has been the UK’s withdrawal from the European Union. The Research and Information Team have compiled research briefings and obtained up-to-date material to inform debate on the very broad range of topics that are affected by Brexit, while Select Committees have held numerous inquiries and published reports on the impact of Brexit in their subject areas. This authoritative information has also been made available to the public via the UK Parliament website. The EU (Withdrawal) Act has been appropriately dealt with by Parliament, which has required much expertise from our Chamber Team and other teams. This is not the end of the Brexit process; our main task for the year ahead is to provide ongoing support to the House and its Members as the process continues.

Sir David Natzler KCB, Clerk of the House, House of Commons Annual Report and Accounts 2017–18 Performance Report

10 © UK Parliament/Mark Duffy © UK Parliament/Mark

The changes we have put in place this year ... will improve how we deliver services in years to come. Performance Report Annual Report and Accounts 2017–18

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Introduction by the Director General to set up a Sponsor Board and Delivery Authority, Over the past year we as a House Service have faced initially in shadow form, before the necessary legislation many pressures in delivering our mission of supporting is enacted. This presents further challenges for our a thriving parliamentary . As an organisation governance, making it essential that we increase the we have had to start recovering from the five terrorist pace of improvement to our framework of governance, attacks which hit the UK in 2017, including the risk management and control. Westminster attack in March, and rethink how we In addition to Restoration and Renewal, our staff are protect those on our Estate. This year our staff have also undertaking several projects to maintain the Palace of supported Parliament during the snap General Election, Westminster before it is possible to decant. We have dealt with a sustained cyber-attack and subsequent made much progress on the renovation of Elizabeth reprioritisation, and begun enacting the decision by Tower, one of the UK’s most famous landmarks, and both Houses on the Restoration and Renewal of the with the conservation of Westminster Hall, the oldest . More recently the issues raised in part of the Parliamentary Estate. There are many relation to bullying and harassment have highlighted the improvements that can be made to the Estate, but given importance of our commitment to providing a working both the limited capacity to deliver a large number environment that is fair to all and where everyone is of capital projects at one time, and a world in which treated with respect and dignity. Meanwhile, throughout Parliament has over a million visitors a year, it has been the year, we have also been addressing the recognised decided that only those projects which improve security, weaknesses in our management and governance fire safety or health and safety should proceed. processes, which inhibit our effectiveness. The performance of our staff has had to meet these During 2017–18 we placed a particular emphasis on our challenges as they arose over the year. The House Service customers, our staff and the ways in which we work. has continued facilitating effective scrutiny and debate We deliberately invested in three change programmes; by exercising its functions with brilliant support for accelerating our people change, investing in customer Members, as the process of leaving the European Union service and reviewing new ways of working. The three gathers pace. The legislative burden of this process in time-limited Director General programmes continued itself adds significant pressures to the workload of our to help us make the transformational shifts, working staff, but has not detracted from their performance over together to deliver cultural change. The People 128 sitting days this year. Programme completed this year and its work to raise the profile and impact of people development across the A particular highlight for me this year has been how service continues to be delivered. we have been involving and inspiring the public. 2018 marks 100 years since Parliament passed a law which The changes we have put in place this year, including allowed the first women, and all men, to vote for introducing smart working pilots and also smaller the first time. We have been encouraging the public innovations such as digital forms to reduce bureaucracy, to celebrate this milestone by getting involved with will improve how we deliver services in years to come by Vote 100 events across the UK. We have continued to giving our staff the tools to work in the ways which suit facilitate education tours, digital debates, and held the them best. biggest-ever UK Parliament Week, with 4,569 activities This year we have made progress towards improving our reaching 350,400 people. Further to this, petitions governance, risk management and control framework. continue to grow as a means to involve and inspire the This improvement puts us in a better position as an public with 18 e-petitions being debated in Westminster organisation to face the undoubted tests and demands Hall during 2017–18. that lie ahead in the coming years. We can see the Our efforts in securing Parliament’s future have come initiatives of recent years beginning to bear fruit and to the forefront this year and will be a visible focus for where there has been improvement this needs to be many to come. Early in 2018 the Houses of Parliament embedded. However, in areas where the rate of progress took one of the most momentous decisions about the has not been sufficient, action needs to be taken to Palace itself in our history. Members of both Houses address weaknesses, so that we can continue to be debated and subsequently agreed a way forward for effective. We will not be complacent, and we will take the Palace of Westminster Restoration and Renewal the steps necessary to meet our challenges. Programme, and agreed to temporarily move out of Ian Ailles, the Palace while this takes place. Work is now ongoing Director General, House of Commons Performance Report

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Our strategy The House Service mission is supporting a thriving parliamentary democracy. To help us achieve this Vision for people mission our work focuses around three core objectives: We are proud to support Parliament and its Facilitating effective scrutiny and debate – We will Members. We are diverse, reflecting the public work as a team to support the business of the House. we serve, and work in an accessible and inclusive We will provide Members with outstanding professional environment. We are impartial and put the expertise, advice, research, facilities and technology, customer at the centre of everything we do. We based on a sound understanding of their needs and are collaborative and flexible, and all have a role in priorities. Whatever our role, we will be valued by managing change and developing our services for Members for our expertise, empathy, innovation and the future. customer service. We are engaged, have a healthy work-life balance Involving and inspiring the public – We will open up and embody our values. Pay and benefits are fair the House of Commons to the public and show how it and well-understood. We are all recognised and is essential to democracy, and changing for the better. rewarded for what we do, understand each other’s Focusing particularly on the young and marginalised, contributions and treat each other with courtesy we will create and promote opportunities to engage and respect. in the House’s work, make it relevant and accessible, and challenge misconceptions. We will facilitate We have diverse career experiences and want representation and enhance the reputation of the House the best people to do the job. This means that in the UK and internationally through our work. we are a largely permanent workforce and have opportunities to develop at all levels, as well as Securing Parliament’s future – We will steer the welcoming people from outside and on short- House through the challenges it faces, balancing term contracts. innovation with respect for cherished practices. We will work with the to protect and enhance We are empowered to challenge and take the physical fabric of the Estate, protect Parliament from decisions based on role not rank, and are held threats and prepare for the future, while maintaining accountable for what we do. We focus on vibrant democratic processes. Whatever our role, we will people and outcomes. Our managers have the respond flexibly to changing demands. time, capability and support to manage well and drive performance. We have a coaching approach to people development and all take Vision for our people responsibility for our own development. The House Service and Parliamentary Digital Service together employ over 2,750 people. We have developed We have the skills and tools needed to help the a powerful vision for people that underpins our goal of House of Commons function effectively, are fostering a skilled, united and diverse workforce. We digital by default and spend money wisely. We have also identified four core behaviours that all staff are invest in and support the variety of specialisms expected to display in performing their roles. Creating needed by the House and listen to and learn specific behavioural guidance has many benefits. from others. We can work at pace, have a It provides a common framework for evaluating culture of innovation and take appropriate risks performance. It also supports our diversity and inclusion to deliver. agenda, and helps us to challenge inappropriate behaviours. Behaviours Ambitious – we aim high Collaborative – we work together Helpful – we help our customers and each other Proactive – we deliver HOUSE OF COMMONS STRATEGY 2016-2021 Performance Report

Supporting a thriving parliamentary democracy

Our objectives

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

To achieve

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

Through our behaviours

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

Demonstrating our values

Maximising Fostering our skilled, Working impartially, Putting the customer Spending money the potential united and diverse inclusively and in at the centre wisely of digital workforce partnership Annual Report and Accounts 2017–18 Performance Report

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Valuing Others mail and newspapers to food and IT equipment, into The House of Commons Service is committed to and across the 16 different buildings that make up the providing a working environment that is fair to all and Parliamentary Estate, and safely remove waste out of the where everyone is treated with respect and dignity. Estate. Each of us is responsible for sustaining this environment through how we behave towards each other and what Providing information we do every day. The Valuing Others policy sets out the Information and communication are central to the work expectations for all staff working in the House Service. of the House of Commons. Committee Office staff ensure that select committee members are well briefed and The purpose of the Valuing Others policy is to set supported in conducting evidence sessions and producing out the rights and responsibilities of employees reports, while the provides and managers to ensure that we are able to work a wide range of research briefings for all Members in in a positive environment, free from unacceptable relation to legislation, debates and other topical issues, behaviours such as discrimination, harassment, bullying which are published on our website. The Library also and victimisation, and feel valued for the work we do. responds to research enquiries from individual Members and their staff. The UK Parliament website is managed by About the House of Commons Service the Parliamentary Digital Service. We also have a broad range of social media accounts that allow the House to There are dozens of activities that need to be communicate with the public about the many different undertaken every day to ensure that the House of activities taking place here. Our Communications Office Commons can function effectively and efficiently. This manages corporate media engagement and also ensures section describes the work undertaken by the 2,750 that Members, their staff and House Service staff are kept people who work for the House of Commons Service well-informed at all times. and the Parliamentary Digital Service. Engaging with the public Ensuring that the Chamber and committees Involving and inspiring the public is a key part of our function effectively strategy. We strive to provide a warm welcome to everyone First and foremost, we need to ensure that the House who visits Parliament, whether for democratic access, of Commons Chamber, the debates in Westminster Hall official business, tours or educational visits. Beyond and all committee meetings can function effectively. Westminster, we run outreach and engagement events This means having the right people in place to provide across the country for children, for community groups and expert and impartial procedural advice for Chairs for university students, to explain how Parliament works and Members, and preparing and publishing all the and how they can get involved. We provide opportunities business papers before and after each sitting. Live feeds for the public to participate in parliamentary business, of these proceedings are produced for TV and online including through e-petitions, interaction on social media broadcasting, and an authoritative official record is and submissions to select committees. rapidly compiled in Hansard. Managing resources Providing the facilities we all need to work We need to manage our resources wisely: our people, Behind the scenes, we need to ensure that Members, our money and our Estate. People are our greatest their staff and House Service employees have the right asset. We must train and develop our workforce so we accommodation and equipment to do their jobs: clean, have the capacity and capability to deliver our strategic safe and secure offices and meeting rooms, a secure and objectives, recruiting where necessary. We also need to resilient network infrastructure, and the technology and plan and monitor our expenditure, pay our employees systems we all need to support our work. We provide and suppliers and handle our income efficiently. The catering services across several venues in different Palace of Westminster is a Grade 1 listed building and buildings from early in the morning until late at night. a UNESCO World Heritage site. This, and the other We work closely with the police to ensure the security of buildings that make up the Parliamentary Estate, need to those on the Parliamentary Estate by managing perimeter be maintained on a daily basis to ensure they remain a controls, searching and screening visitors, delivering a safe and functional place for all. At the same time, we are range of internal security measures and providing security also planning and undertaking major refurbishments and support for Members working away from the Estate. upgrades of the fabric and infrastructure of the Estate. We manage the efficient delivery of items, ranging from Performance Report Annual Report and Accounts 2017–18

15 © UK Parliament/Mark Duffy © UK Parliament/Mark Annual Report and Accounts 2017–18 Performance Report

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245 8 17 5 26 5 Gross resource Total income Views on expenditure Parliamentlive.uk

1 08 96 857 2 752 Visitors to Education visitors people employed by Parliament to Parliament the House of Commons and Digital Service

26 197 173 15 627 Research enquiries Select committee Pages of Hansard answered by the reports published published Commons Library Snapshot - 2017-18 in numbers Performance Report

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86 389 37 389 Cases dealt with by Maintenance Digital Service Desk cases fixed

194 2 1 46 1 192 Capital Meals served Media enquiries investment answered

15 627 76 463 128 17 712 Parliamentary Sitting days Passholders with questions tabled in the main access to the estate chamber Annual Report and Accounts 2017–18 Performance Report

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Performance Analysis We measure impact through quarterly case studies. Two of these are included in this report – the Work and Pensions Committee’s inquiry into Universal Credit (page 20) and UK Parliament Week (page 26). We also Performance summary measure the impact of our outreach and engagement We are still developing our strategic performance work and this is described in more detail on page 36. framework (see page 36 for more details) but we now have new sources of information becoming available We did some pilot work to help us understand how to that are helping to inform us how we are doing and measure reputation late in the financial year, and we how we may need to adjust our efforts as a result. will build on this in 2018–19. The focus of our sustainability measures is on Finance our people, our finances and our environmental performance. Our people measures include sickness The table below summarises our resource and capital absence (an average of 6.6 days per person per expenditure for 2017–18. More information about this year) and staff turnover (within the range of 11- is contained in the in the Statement of Parliamentary 12% for most of the year). We measure our financial Supply and the accompanying commentary on pages sustainability by monitoring our spending and 77 to 83. compliance with internal policies. Financial forecasting was particularly difficult in 2017–18 due to uncertainty Estimate Outturn Variance around accommodation and delays with major £million £million £million estates projects and programmes. More narrative on outturn and variances is provided in the Statement of Gross resource Parliamentary Supply Commentary on pages 82–83. expenditure 273.9 248.2 25.7 Our four long-term environmental targets are carbon Income (18.1) (17.5) (0.6) reduction, a reduction in water usage, reduction in waste and increase in recycling. At present we are on Transfer of - (2.0) 2.0 target with reducing carbon and water but are under- estimate performing on waste and recycling. More information Net resource 255.8 228.7 27.1 about our environmental performance is available on expenditure pages 39 to 42. Capital 202.7 194.2 8.5 expenditure Business plan achievements This section explains the work that has been Strategic outcomes undertaken to meet our strategic objectives outlined on We already measure the satisfaction of many of the page 12, focused around delivering the commitments services we provide, and are extending both the range contained in the House of Commons Corporate 1 and quality of this work in 2018–19. Satisfaction of those Business Plan for 2017–18 . visiting Westminster on commercial tours (a composite Certain services based within the House of Commons measure of satisfaction with the tour itself, the booking Service are undertaken on behalf of both Houses2. process, the service provided by our Visitor Assistants, The two Houses have joint stewardship of the Palace and TripAdvisor scores) was regularly above 95% during of Westminster and joint responsibility for many 2017–18. More information about education tours and parliamentary services including the Digital Service outreach work is provided on pages 24 to 27. We also and Security Department. Each House also incurs measure satisfaction with internally-provided services such administration costs on the other’s behalf and these are as maintenance (94% for the year) and catering (86% in recharged. While costs are strictly apportioned the November 2017 snapshot).

1 www.parliament.uk/documents/commons-commission/Commons-Management-Board/Corporate-Business-Plan-2017–18.pdf 2 Note 16 of the accounts on page 118 details the shared services between the Houses. Performance Report Annual Report and Accounts 2017–18

19 between the two Houses (the Accountability Report and the Financial Statements starting at page 46 reflect the House of Commons share only unless stated otherwise) the performance analysis relates to the services and activities as a whole.

Facilitating effective scrutiny and debate

General Election On 18 April 2017 the Prime Minister announced that a General Election would be held on Thursday 8 June. In contrast to the 2015 election, where there had been many months of planning, this time the House Service had just over seven weeks to prepare and deliver a range of election-related services. Given the short timescale, provision was modelled closely on that offered in 2015. While support for new and returning 2017 General Members was a priority we also needed to address the needs of standing-down and defeated Members. Election: A truly Once again we used a network of ‘buddies’ – staff collaborative trained in customer service and in the workings of different parts of the House – to support 99 new effort Members3 in the days and weeks after the election. They were supported in this work by an updated ‘iBuddy’ app (developed by the Digital Service) to Sarah provide key information about parliamentary rules, Principal Clerk of Select Committes groups and events. A key part of the preparations was the New Members Reception Area set up in . This provided a wide range of services, allowing None of us expected a snap election to be new Members to meet their buddy, receive their pass, called in 2017, and many of us found our sign up for pay and expenses with the Independent work schedule and responsibilities change Parliamentary Standards Authority (IPSA), receive their overnight. As the Senior Responsible Owner IT equipment and register with the Travel Office. Nearly for House of Commons General Election 300 volunteers from the Civil Service attended a ‘dress planning, I relied on people dropping rehearsal’ to listen to a practice Chamber briefing, test everything they were doing and making the swearing in process, and act as new Members to see sure that all tasks were completed on time how the New Members’ Reception Area handled them. – such as producing dissolution guidance, At the same time we provided a range of services for training our buddies for new Members, and the 31 Members who stood down at the election and setting up all the services delivered through the 67 who were not returned4.This included providing the New Members’ Reception Area. The advice about winding up their offices at Westminster need to respond to this challenge created and in their constituencies, how to advise their staff, opportunities for many of our employees to returning IT equipment and pension matters. gain experience working in other teams, in a truly collaborative way. It was a brilliant team effort, which was greatly appreciated by new Members. The story of the 2017 General Election is one that demonstrates what we

3 87 Members were newly-elected and a further 12 former can achieve together as a House Service, Members returned to the House after not serving immediately working closely with our colleagues in the prior to the election. Parliamentary Digital Service. 4 One seat was already vacant; a by-election had been scheduled in Manchester Gorton but his was cancelled when the General Election was called. Annual Report and Accounts 2017–18 Performance Report

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Support effective committees We have worked to strengthen the relevancy of select During 2017–18 we have supported select committees committees by monitoring and benchmarking media in their work to scrutinise the Government: by planning coverage, website content and social media activity. and facilitating evidence sessions, preparing briefing We have also responded to research undertaken by the material, organising opportunities for the public to Institute for Government that looked at how committees engage with inquiries and in promoting their work could measure their effectiveness. We capture feedback through the media, website content and social media. from Committee members and witnesses and use this to Some 936 select committee meetings took place in refine our services. 2017–18, and 173 reports were published. (These figures are lower than a typical year because of the Support the legislative process break in activity caused by the General Election.) The UK’s withdrawal from the EU continues to take Several committees have examined aspects of centre stage in the work of both Houses of Parliament. preparations for and implications of Brexit in addition There have been (and will continue to be) complex to the work of the Exiting the European Union legislative processes to oversee in the Chamber and in Committee (which has focused mainly on the process committees, and Members require expert advice at all of leaving). These include: the Environment, Food and stages. At the same time we also need to report and Rural Affairs Committee looking at prospects for the broadcast some of the most high-profile debates seen in UK fishing industry; the Health Committee looking at Westminster for some time. the impact on the supply of medicines after Brexit; and The Commons Library’s main Brexit site6 contains a wealth the Home Affairs Committee looking at immigration of information for Members, their staff and the public at and at policing. In addition to scrutinising the work of large about the legislative process for withdrawing from government departments, some inquiries are prompted the European Union, the negotiations themselves, and by current events, such as the Government’s response the likely impact on different parts of the economy. The to the hurricanes in its Overseas Territories (Foreign Commons Library has also created reading lists for those Affairs Committee), or the collapse of Carillion (a joint wanting to see what others have written on the topic. inquiry by the Work and Pensions Committee and the Our ‘Procedural Hub’ in Portcullis House provides a new Business, Energy and Industrial Strategy Committee). one-stop shop for Members to obtain advice. We are It is difficult to measure the impact the work of select also investing in the skills and expertise of the staff who committees has had on public policy – not least because work in Chamber and committee roles. The work of our changing policy can be a long and complicated process. Customer Programme (see page 33) is enabling us to However, there are many examples where select respond to new requirements of the House and changing committee reports have caused the Government to expectations of Members. change its approach. One such example is that of the We have been developing plans to introduce new inquiry into Universal Credit undertaken by the Work Bill drafting, amending and publishing software. and Pensions Committee. The Committee had not been Currently, a range of different tools are currently used satisfied by changes announced by the Government, and to prepare and draft legislation, amend it during its decided to focus on pushing for change in the upcoming passage through Parliament, publish it on the main UK Budget. In October 2017 they agreed a unanimous legislation website7, and finally to archive it. Back in report5 with one strong recommendation: that the 2013, a programme was established to test the feasibility Department for Work and Pensions (DWP) should cut the of a browser-based drafting tool for UK and Scottish standard initial wait for first payment from six weeks to legislation that could support the end-to-end process. a month. A debate on the report was held in backbench The programme involves both Houses of Parliament, time a week before the Budget, and the House the , the Office of the Parliamentary unanimously backed the Committee’s Motion. In the Counsel, the Scottish Government’s Parliamentary Budget the Government announced a set of measures Counsel Office, and The National Archives. Following that exceeded the Committee’s recommendation. Not a procurement process, a preferred bidder has been only was the initial wait reduced but more financial identified to further develop the service and on-going support was made available to new claimants. support. This will now move forward to business case approval in early 2018–19.

5 https://publications.parliament.uk/pa/cm201719/cmselect/cmworpen/336/336.pdf 6 www.commonslibrary.parliament.uk/brexit 7 www.legislation.gov.uk © UK Parliament/Gabriel Sainhas Annual Report and Accounts 2017–18

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I travelled to Washington DC to facilitate media coverage of the public evidence session held there on 8 February 2018 by the Digital, Culture, Media and Sport Committee as part of its high-profile inquiry into fake news and misinformation. Working closely with a range of other teams and colleagues at Parliament, I helped to coordinate the live broadcasting of this session, during which the committee took evidence from major news organisations, data experts, social media companies and technology firms. In a fascinating session, Facebook, Google, Twitter and YouTube were questioned on their handling of personal data and their plans to tackle fake news. The session was a great success, attracting global media attention. Supporting Representatives from Facebook were also asked about data company Cambridge Analytica weeks before the Observer/ New York Times story broke a select in mid-March, propelling questions over their use of personal information onto the committee global stage. session overseas

Lucy Select Committees Media & Communications Officer Annual Report and Accounts 2017–18

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There’s a lot of uncertainty Research and complexity with Brexit, so independent analysis has become increasingly important in explaining what’s happening. for the EU Working as a researcher in this environment is fascinating but it also adds pressure. We have to react to events quickly and produce things at short notice. Withdrawal And that’s not so easy when you have small children! Over the summer we had to produce a large research briefing on the Bill European Union (Withdrawal) Bill just before the Members came back but, of course, it was the school holidays. I think that was the busiest August I’ve ever had and the hardest that I’ve ever worked.

Jack Commons Library Researcher Performance Report Annual Report and Accounts 2017–18

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Deliver authoritative and engaging and cities across the UK, including Glasgow, Cardiff, information and advice Sunderland and Lisburn, as well as holding several events In March 2017 we set up a programme to establish a at Westminster. We met over 440 of Members’ staff Procedural Practice Centre of Excellence. The aim of to advise on a range of topics including research and this was to bring together a range of different initiatives information, digital services and security. intended to develop the expertise of our own staff Towards the end of the financial year we piloted and also that of Members and their staff in procedural an induction event for Members’ staff based at matters. We want to ensure that Members can have Westminster. While these staff are employed by confidence in the advice we provide and are equipped to individual Members and not by the House Service undertake their roles of legislating and scrutinising the we want to do all we can to help them familiarise Government. We have now put the Procedural Practice themselves with the way the House of Commons works Centre of Excellence onto a permanent footing, creating and ensure that they are aware of the services available a role as the Centre’s Director, co-ordinating activities, to help them support their Member. Feedback from developing new services, and ensuring quality. these events has been very positive and the pilot will One of the workstreams of the Centre of Excellence become a mainstream activity in 2018–19. has been to develop a ‘plain English’ guide to House of Members and their staff increasingly consume our Commons practice and procedure. Although Members research outputs by digital channels rather than in hard can find out about procedure from Erskine May and copy. To support transition we have enabled briefings Standing Orders, these are not always the quickest from both the House of Commons Library and the or most practical sources of information. It is not just Parliamentary Office of Science and Technology (POST) Members who need access to this information but to be mobile-friendly. often their staff too. The guide will also be of interest to people whose work relates to Parliament, such as Provide essential technology political journalists and civil servants. The online guide is The Parliamentary Digital Service provides hardware, written in plain English and is intended to be practical, software, digital services and support for approximately comprehensive, up-to-date and accessible. At present 9,000 network users: Members of both Houses and the guide covers five areas: their staff, staff of both administrations and the Digital Service itself. In total, they use approximately 150 • Bills and delegated legislation separate technology applications as a core part of their • Early Day Motions work at Parliament. These users require a diverse range of support services, which are provided 24 hours a day, • Questions 363 days a year. • Petitions On Friday 23 June 2017 there was a sustained cyber- • Statements attack on the Parliamentary Network. The whole of the Digital Service was diverted to customer support in the immediate aftermath of the attack while all More sections are due to be added in 2018–19. non-essential project activity was suspended. There The demand for our research service expertise has was a substantial amount of emergency activity, not all continued to grow. In the nine months from July 2017 of which was negative. Some technical rollouts were to March 2018 (i.e. discounting the election period), the accelerated and deployed more quickly than originally Library answered 22,269 research enquiries - 5% higher planned, such as multi-factor authentication (MFA). than the same period in the previous year, and the busiest- Other systems were taken offline temporarily. We ever nine-month period recorded by the Library. Part of detected the attack early, limited its impact and put the growth in demand has been due to Brexit, but this has huge effort into recovery, meaning that Parliament was been very much in addition to requests on other subjects. able to sit as planned on Monday 26 June and only a very small number of accounts suffered data loss. More During 2017–18 we have continued with our information about the cyber-attack is available in the ‘constituency roadshows’ hosted in different parts of the governance statement on [page 62]. country. These provide an opportunity for Members’ staff who are based in constituency offices, and who rarely The cyber-attack, combined with the impact of the visit Westminster, to learn about the services available to General Election, meant that the Digital Service needed to them. Over the course of the year we visited 15 towns review its priorities for the remainder of the financial year. © UK Parliament/Jessica Taylor Annual Report and Accounts 2017–18 Performance Report

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Behind-the-scenes network technology has been Involving and inspiring the public improved during 2017–18 with an upgraded infrastructure on the Parliamentary Estate. This has Communicate proactively provided users with a faster, more secure and more Our aim is to communicate proactively with the reliable cabled network. Relocation of some digital public in an open and transparent way to increase services to a new data centre has provided additional understanding of the role, work, value and impact resilience at a reduced cost. Space and power in the new of the House of Commons and its Members. data centre are charged on a pay-as-you-use basis so the Internally we are developing our approach to facility can be scaled up or down according to demand. communicating effectively with Members, their staff Overall the new data centre will provide a saving of and with colleagues across the House Service. The £1.8 million over five years compared to the former Communications Centre of Excellence is now providing service. We have continued to migrate services to a common framework to encourage collaboration, Microsoft’s Azure cloud platform as Parliament’s primary reduce duplication and improve impact in our data centre. This provides resilient, secure storage communications work. without having to buy and manage our own servers. To further develop our approach to building public During 2017–18 the Digital Service started the technical knowledge of and participation with the House, we work to enable the roll-out of Skype for Business, which have recognised the importance of understanding provides instant messaging, voice and video calls and public perception of the House and its work. We are online meeting facilities. The Boards of both Houses currently developing a framework for measuring public determined that administration staff should use headsets understanding of and attitudes towards the House led in order to fully exploit the capabilities of Skype. By by our internal evaluation and insight specialists and the end of March 2018, almost 2,000 administration partnering with external experts such as the Reputation staff were using Skype, along with a small number of Institute. The outcomes of this work will help shape Members from both Houses who are trialling the service the priorities and direction of our communications and in order to plan their roll-out in 2018–19. participation activity in 2018–19. We had intended that the roll-out of Microsoft Office In November 2017 the first of three television 365 would be completed during 2017–18, but this documentaries was broadcast, providing a behind- work was affected by both the General Election and the-scenes view of the Elizabeth Tower (commonly the cyber-attack. As part of the reprioritisation work, known as ‘’). ‘Big Ben: Saving the World’s Most a revised success measure of 1,000 administration Famous Clock’ featured the clock mechanics, engineers, users was agreed, but in the event only 546 migrations scaffolders and historians involved in the running had taken place. It is now expected that roll-out to of the clock along with preparations for the major administration staff will be complete by the end of refurbishment programme (see page 28). December 2018, with Commons Members by March 2018 marks the anniversary of landmark moments in the 2019 and Lords Members by June 2019. journey towards universal suffrage and the representation of all citizens in Parliament. Throughout the year the UK Parliament Vote 100 programme is celebrating these major milestones, and the contribution of women to politics in the UK, with a series of events, exhibitions and educational activities. More information about events throughout the year are available on our website8.

8 www.parliament.uk/vote100 25

Celebrating a century of women’s voices at Parliament

The Representation of the People UK Parliament is marking these Act, with the BBC broadcasting Act passed by Parliament in 1918 and other significant democratic live throughout the day from the enabled women over 30 who met milestones through Vote 100, a year- Palace of Westminster and a special a property qualification to vote for long public engagement programme evening reception being held in the first time, and also extended featuring a range of exciting Westminster Hall, which included the vote to all men over the age of events and activities. The Vote 100 addresses by the Prime Minister, the 21. This paved the way for universal celebrations began on Tuesday 6 Speakers of both Houses and Jordhi suffrage ten years later, through February 2018, the centenary of Nullatamby, Member of the Youth the Equal Franchise Act 1928. The the Representation of the People Parliament for Thurrock. 26

I am really proud to have been part of the team that delivered the biggest ever UK Parliament Week – our annual festival that enables people across the UK to engage with Parliament through local events and activities. We went from 311 events in 2016 to over 4,500 in 2017, reaching 350,000 people, and covering every one of the UK’s 650 constituencies. We developed 13 official partnerships with organisations including Girl Guiding and the Church of , and we also created our first ever corporate partnership, with Lego. We created an innovative resource pack to encourage people to take part. These proved so popular that we had to reprint the packs not once but twice, to keep up with demand! Each pack was personalised and sent out by hand. The effort involved in creating and managing partnerships, and keeping our participants informed and engaged was massive, but it’s amazing what we can achieve when we get a campaign right. This year we’re aiming to engage half a million people in Delivering UK Parliament Week, so stay tuned! UK Parliament Week Michelle Campaigns Team Performance Report House of Commons Annual Report 2017

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Publish open and accessible content their knowledge of Parliament has increased ‘a great We have continued to build and populate the new data deal’ or ‘a fair amount’ as a result of the event. service that provides data to the new parliamentary In November 2017 we held UK Parliament Week, website currently in development (beta.parliament. our annual flagship event for promoting awareness uk). This is the infrastructure that underpins the user of, and engagement with, the UK Parliament. Since experience, focusing on the tagging and organisation the first Parliament Week in 2011 we have changed of data. The first datasets were released to the new site the model of delivery, moving away from the hosting during 2017–18: events primarily at Westminster and focusing instead on helping organisations to run their own events • Members’ pages – the initial release of Members’ and activities across the UK. Our follow-up research pages opened at the end of March 2017, and indicated that organisations believed their participants has been supplemented with new features had benefited from taking part in terms of enjoyment, including role history, a postcode search, contact awareness, knowledge and skills. The most cited benefit information and constituency maps. was an increase in knowledge about UK Parliament, • Photographs of Members – the General Election democracy and politics, mentioned by 84% of partners and new Parliament provided an opportunity to who responded. This was followed by enjoyment (72%) take professional photos of Members immediately and an increase in awareness of the work of Members after taking the Oath of Allegiance. Out of 650 and the UK Parliament (71%). Members, the Digital Service photographed around 90% of Members in just two days. Members of the Focus on the young and marginalised House of Lords were photographed later and again We support teachers in their teaching of politics and the turnout was high. the role of Parliament, and we encourage and help young people to get involved in the democratic process In September 2017 we launched our new website through the Education Service’s ‘Visit Parliament’ search service, providing a more up-to-date look along and regional outreach programmes. We also support with new search technology behind the scenes. The Members from both Houses in their work with the old search function has now been turned off and the public, especially young people. This work uses a variety decommissioning of this service is the latest step in of different channels including online interactive games moving Parliament’s website services to new platforms. and video packs for school age children and a range of Aside from providing a better user experience the teaching resources to be used in schools. We have also move to a cloud-based platform has reduced costs by developed and implemented an MP/Peer engagement around 75-80% compared to the previous non-cloud strategy, to increase their awareness of and involvement hosting contract. in our education and outreach work. One of the successes of 2017–18 has been the #LordsLive Skype Go to where the people are sessions, where groups of children aged 10–18 can While continuing to provide a range of visitor services put their questions direct to a Member of the House of at Westminster, we also engage with people and Lords live from their school hall. We have also produced communities across the UK. We work in partnership a range of new teaching resources to support the Vote with a range of organisations, including tenants and 100 anniversary commemorating the journey towards residents groups, voluntary organisations, faith groups, universal suffrage. youth groups, sports groups and many more. We Feedback from teachers who bring students to provide a range of different workshops, covering the Westminster on education visits is consistently high, basics of how Parliament works, how to get involved with over 95% rating their visit as ‘excellent’ or ‘good’ in the political process, along with sessions tailored overall. specifically to women’s groups and adults with learning difficulties. In order to extend our reach further we are now training others to deliver these workshops and other approved training to their own communities. We ask people participating in our outreach events for feedback on what they had learned during the session. Over the course of 2017–18 as a whole, over 5,000 participants responded, with some 85% saying that Annual Report and Accounts 2017–18 Performance Report

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Create innovative ways to participate the Palace of Westminster was appointed in July House of Commons e-petitions are now a firmly- 2015 to consider an independent options appraisal established way in which the public can engage with and make recommendations on a preferred way Parliament. The Petitions Committee has the power forward. The Joint Committee published its report on to schedule debates on e-petitions in the House of 8 September 2016. It concluded that the lowest risk, Commons’ Second Chamber, Westminster Hall. It most cost-effective and quickest option to undertake considers all petitions which receive over 100,000 these essential works would be for all Members, Peers signatures for debate. In deciding which petitions should and staff to move out of the Palace temporarily in one be debated, it takes into account how many people single phase. It also recommended that a clear decision have signed the petition, the topicality of the issue on the next steps was needed without delay. The raised, whether the issue has recently been debated in report contained a draft Motion recommending that a Parliament, and the breadth of interest among Members. Sponsor Board and Delivery Authority be established as 18 e-petitions on a wide range of topics were discussed soon as possible. in Westminster Hall during 2017–18, including: In the event, it wasn’t until 31 January 2018 that the House of Commons debated the Committee report • Whether the UK should leave or remain in the and agreed a Decision in Principle. (The parallel debate EU, and whether there should be a second and agreement in the House of Lords took place on referendum. 6 February 2018). This inevitably limited the nature • Abolition of the TV licence. of work that could be undertaken in the meantime, focusing on preparatory work that was option-neutral. • Export of live animals. In February 2018, the House of Commons Commission • Sale of fireworks. published a written statement9 outlining the next steps • Teaching of British Sign Language in schools. for the Restoration and Renewal Programme. This noted that a Sponsor Board and Delivery Authority would be established in shadow form. Until the shadow For the last debate listed above the House of Commons Sponsor Board is established the Programme will provided simultaneous interpretation in British Sign continue to be delivered under current governance Language for the first time ever. arrangements. In the meantime, the Programme Team, The Digital Outreach team has continued to support supported by its client advisory services consultants, will Members to engage directly with the public by continue work in the following areas: scheduling one-hour live digital debates on the House of Commons social media accounts. This enables members • Further investigation and documentation of of the public to get involved and share their experiences the current physical condition of the Palace of and opinions on a topic scheduled for Parliamentary Westminster and its building services. debate. Six digital debates took place in 2017–18: four • Further studies on the feasibility of the Queen for debates in Westminster Hall and two (for the first Elizabeth II Conference Centre as temporary time) for Private Member’s Bills. accommodation for the House of Lords.

Securing Parliament’s future • Design of as temporary accommodation for the House of Commons, Carry out and prepare for major renovation of which is being taken forward as part of the the Palace of Westminster Commons’ Northern Estate Programme. The Palace of Westminster Restoration and Renewal Programme was established to tackle the significant • Development of a client brief for the design of the work that needs to be done to protect and preserve the works to the Palace of Westminster. heritage of the Palace of Westminster and ensure it can • The development of the required Outline Business continue to serve as home to the UK Parliament in the Cases (OBCs), compliant with HM Treasury’s st 21 century and beyond. A Joint Committee on Green Book.

9 www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2018–02–28/HCWS496 Performance Report

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• A further round of medium-term mechanical and electrical, public health and conservation work to mitigate the operational risks to Parliament presented by the condition of the building between now and the commencement of the construction phase of the Restoration and Renewal Programme.

A number of buildings on Parliament’s Northern Estate are in need of repair and refurbishment to ensure they can continue to support the conduct of parliamentary business. The building fabric of Norman Shaw North, Norman Shaw South, 1 Derby Gate and 1 Parliament Street are in need of refurbishment and the services are in need of a major overhaul. The Northern Estate Programme (NEP) will refurbish these buildings. NEP will also develop the additional space and facilities required for the House Conserving of Commons to decant from the Palace, including an operational Chamber, committee rooms and House our heritage support services. NEP is currently in the design planning stages for the individual Northern Estate buildings. for future During 2017–18, negotiations with the Government generations Property Unit over possible decant accommodation in the Westminster area continued. Earlier plans to acquire space in 100 Parliament Street did not come James to fruition. Instead, it was decided to use Richmond Assistant Curator

House (recently occupied by the Department of Health) © UK Parliament/Mark Duffy as decant accommodation prior to being redeveloped for Restoration and Renewal. The Department of Health One of the most celebrated features in St has, in turn, acquired 39 Victoria Street from Parliament. Stephen’s Hall is a marble statue of ‘Lucius Cary, In addition to these major strategic programmes, we 2nd Viscount Falkland’ (1610–43), which was have around 100 other projects running at any one time sculpted in 1847 by John Bell (1811–95). Many which are critical to maintaining the entire Parliamentary people over the years have shared the story that Estate in working order, including: a suffragette protester chained herself to the statue and broke the sword. It was, in fact, the • Undertaking essential refurbishment of the fabric statue’s spur that was unintentionally broken of the Palace of Westminster, including cast iron off by the weight of the chain. However, the roofs and various stonework conservation projects myth surrounding the broken sword grew over in the courtyards. time, and the statue became a popular spot for people to stop for photographs, and even touch • Urgent fire safety work, focusing on achieving a the sword. Perhaps unsurprisingly, the blade has defined level of life safety before Restoration and been broken by accident on various occasions, Renewal. most recently in 2017. The Curator’s Office has • Renovating the Elizabeth Tower and the Canon worked with specialist sculpture conservators to Row building. create a replica blade for the statute, which has now been installed. Repairs have also been made • Enhancing security around the Parliamentary Estate. to the original marble blade, which will be kept safely in storage in a custom-built case, ensuring For information about the expenditure on the that this important piece of national heritage is Restoration and Renewal Programme and on the preserved. Northern Estate Programme, see page 83. Annual Report and Accounts 2017–18 Performance Report

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Maximising the potential of digital that Microsoft PowerApps – an already-licensed tool ‘MemberHub’ is a new digital service for Members operating on the MS Office365 platform – was a viable and their staff, supported by eQuestions and Motions technology solution for larger-scale implementation. (the application used by staff in the Table Office). The project to date has identified 26 paper forms to Both are designed to help Members and House staff be withdrawn, 78 that are candidates for digitising manage questions simply and more efficiently. The and 157 that have been deemed out of scope against Digital Service worked with the Procedure Committee, the criteria. MS PowerApps has been shown to be a the Table Office and the Procedural Publishing Unit to good tool with which to digitise paper forms. A pilot produce a new service that is optimised for tablet and was started in late March 2018, and a business case is mobile. This means that Members can: being created for the fully scoped and funded project to continue during 2018–19. • Submit oral or written Parliamentary Questions using their own secure logins. Introduce new security and resilience capabilities • Search questions and track their progress. There is a delicate balance to be struck between the needs of democracy and security. During 2017–18 we • Receive automatic alerts that keep them informed started to implement the outcomes of the reviews from of the status of a question (for example, if it the terrorist attack on 22 March 2017. A new Security wins a place in the shuffle - the daily randomised Programme and Board have been established to deliver allocation of oral questions). and oversee Parliament’s response to the physical security • Draft questions and ask colleagues to review recommendations arising from the Murphy review of before submitting for accuracy. perimeter security.

• Change staff access levels and tailor them as they Work to enhance Members’ personal safety away from wish. This means the account is both secure and the Parliamentary Estate (originally called Project SAFE) effective as the right people can start submitting has now been absorbed by the new Members’ Security questions immediately. Support Service. This brings together work to enhance physical security in Members’ constituencies (funded by IPSA) with guidance on personal security, online security The new system provides benefits for staff working and safety, and is provided in partnership with the behind the scenes in the Table Office too, by removing Metropolitan Police. the need to transfer data between two systems, and making the workflow for reviewing and publishing We are pursuing Parliament’s interest in the increased questions easier to manage. pedestrianisation of highways around the Palace of Westminster, including through participation in Information about papers laid before Parliament by Streetscape projects led by the Metropolitan Police and Government Departments is available to Members, Westminster City Council / Greater Authority. staff and the public via different business papers: Votes and Proceedings, Lords Business, Order Paper and the To improve the security awareness, culture and behaviour Statutory Instrument (SI) list. The ‘Papers Laid’ system of both Members and staff we have developed an online is a new bicameral system which allows laid papers to training module (‘Security Awareness on the Parliamentary be logged digitally. This has resulted in a reduction in Estate’) which was launched in October 2017. For House duplication of effort between the two Houses. of Commons staff, this forms part of the ‘Essentials’ package that all staff must undertake each year. This is Audio and video clips of parliamentary proceedings supported by a rolling campaign of briefings, publications from the Chamber can now be downloaded from the and events as required. parliamentlive.tv website. Clips can be downloaded from the live stream, as proceedings happen, and from Ensure our long-term financial sustainability the archive stretching back to December 2007. We are committed to spending money wisely and to The Digital Forms & Workflow Project was a small the core principle that there should be an ongoing innovation project (below £50,000 cost). The first challenge to deliver efficiencies through a process of objective was to review existing paper forms and triage continuous improvement. The Finance Committee them against criteria including requirement to exist, has agreed that we should continue to look for option to merge and complexity to digitise. The second opportunities to make further efficiencies and ensure was to undertake proof of concept activities to confirm value for money in the delivery of services. To this end © UK Parliament Annual Report and Accounts 2017–18

31 Defending Parliament against a serious cyber-attack

Parliamentary Digital Service

In June 2017, Parliament came under different passwords. This type of worked around the clock throughout a sustained attack from a determined attack is known as “password spray”, the weekend of the attack to adversary. We know Parliament is a with those most at risk being users secure parliamentary systems. Our high-profile target for cyber-attacks, with weak passwords. As technology efforts ensured that critical services and a significant amount of work evolves, Parliament will be able were available and both Houses of had already taken place to secure to move away from passwords, Parliament were able to sit as normal our services and users following the but while we continue to rely on the following Monday. It was a great establishment of our comprehensive them, we are only as strong as the example of how the work we do security strategy. The attackers tried weakest password set – and rules protects Parliament and supports our to gain access to Parliamentary and standards can’t mitigate all risk. customers across both Houses. accounts by using thousands of The Parliamentary Digital Service Annual Report and Accounts 2017–18 Performance Report

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the bicameral Efficiencies Programme was launched in pool of full-time and part-time Visitor Engagement April 2016. The House of Commons was set a target Assistants to conduct the majority of guiding within of identifying savings of £15.5. million or 10% of the Parliament. These plans were approved by the controllable budget. We are identifying opportunities Administration Committee (Commons) and Services to provide the same or better service for less. Where Committee (Lords), along with the Commissions of services are not well used or valued, or where the cost both Houses. We will be recruiting and training new of a service is disproportionate to the outcome or value guides via a new Visitor Academy, with the new service derived, we will discontinue them. Freed-up resources launching in October 2018. will then contribute to an overall reduction in the cost of Parliament or be used to fund new priorities. To Improving our culture of compliance date around £11.0 million has been identified, which The Commons Executive Board aims to develop an primarily includes: environment where all staff are aligned with the strategic direction of the organisation, as expressed • £5.8 million from reviewing and reducing in its policies and procedures. It is also the vision of spending on a range of items including books, the Board to remove barriers to compliance and gain official publications, office supplies, uniforms, sufficient assurance that we have effective governance training, childcare, overtime, transport, arrangements in place. These efforts are strongly management consultancy and third-party supported by the Administration Estimate Audit and maintenance suppliers. Risk Assurance Committee (AEARAC), who are keen to see improvements in this area. • £1.7 million from spare capacity and savings opportunities in certain budgets. We have worked to improve compliance with the ‘Essentials’ – a package of mandatory training activities • £1.1 million from increased income generation for all staff in the House of Commons. We have (third-party banqueting events, visitor tours, undertaken a range of communications activities to set catering, and rental income from commercial out what is expected of staff, and why. At the same premises). time, we have revised our online training modules to • £0.8 million from digital, such as reduced hosting make it easier for staff to complete this training. Not and software costs and reduced contractor, / third all of our staff are desk-based, so we have made other party and in-house support costs. arrangements for these staff to do their mandatory training. We now review compliance levels on a regular • £0.7 million from developing new ways of basis, identifying any areas of concern and addressing working and using continuous improvement them as appropriate. techniques to deliver efficiencies. Working impartially, inclusively and in partnership Many services in Parliament are already provided on a Further savings of £4.5 million are still to be identified bicameral basis – for example, the Digital Service is a and delivered by March 2020. joint department of both Houses. While hosted in the Our aim is that our commercial operations should deliver House of Commons, Strategic Estates, Maintenance an increased net contribution to the House’s budget Service and the Security Department serve both over time. One of the key planks of this growth as set Houses. Similarly, the Parliamentary Procurement and out in our business plan was to extend our commercial Commercial Service and the are visitor tours to some Sundays. In the event, we did not both hosted in the House of Lords. pursue this option because security considerations after In 2016 we established a Joint Working Programme the March 2017 attack meant the tours would not have with the House of Lords to explore options for further been cost effective. integration of activities. In the initial phase we reviewed The contract for the provision of guides to take paid- which activities offered the most potential for joining for tours is due to end in October 2018, so in 2017–18 up, and where the barriers to change were expected we reviewed the way in which guided tours operated to be the lowest. As the work progressed it became throughout Parliament. This review covered democratic clear that the barriers to merging activities, including access, commercial and banqueting tours, but not the catering and Hansard reporting, were more complex, education tours offered through the Education Centre. and until such time as IT and staff terms and conditions The review recommended the creation of a trained were more closely aligned, formal joining would be Performance Report Annual Report and Accounts 2017–18

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difficult to achieve. The administrations of the two Putting the customer at the centre Houses had differing priorities and appetite for change, The Strategy for the House Service puts the customer and agreed that the formal programme should close at the centre, and one of our desired outcomes is in 2017. Nevertheless, further opportunities for less to achieve the satisfaction of internal and external formal joint working continue to be pursued as part of customers. In addition to Members, our customers also the Efficiencies Programme. include Members’ staff, the public (whether as visitors or more widely) and our own staff as internal customers of The ‘Improving Parliamentary Capability in the Civil others’ services. The Customer Programme has focused Service’ project was a joint initiative between the on ensuring that our services are appropriate, offer value Chamber and Committees Team in the Commons, the for money, and help Members be effective in holding House of Lords and the Cabinet Office to promote a the Government to account and representing their better understanding of Parliament across . constituents. The project aimed to increase core capability and raise engagement at all levels of the Civil Service with a We know that we need to deliver services and interact particular focus on the most senior civil servants. Some with and listen to customers more consistently, as a of the key successes have included: single, seamless team; customers’ experiences rarely relate to just one part of the organisation. This involves • ‘Parliamentary Champions’ created in each cultural change but also putting more cross-service government department, along with a buddying systems in place. In 2017–18 we: scheme linking these Champions to senior Commons and Lords staff. • Established more personal engagement with Members and their staff, and piloted a role which • Annual events with top senior civil servants, leads on understanding and meeting the needs including key speakers such as the Minister for of Members’ staff alongside co-ordinating the the Cabinet Office, the Head of the Civil Service constituency roadshows. and the Clerks of both Houses. • Developed a compliments, complaints and • A new Parliament module included in the fast- comments system to enable these to be logged, stream induction event, which was judged tracked and reported on to identify and address ‘engaging’ or ‘very engaging’ by 92% of underlying issues. Building on the success of the pilot, respondents. this will be progressively rolled out during 2018–19. • The Civil Service ‘Guide to Parliamentary Work’ • Developed more consistent and wider-spread use has been updated with the support of staff from of customer satisfaction measures. These now both Houses. feed into the monthly performance dashboard for • House staff have been seconded to Civil Service the Commons Executive Board (see page 36). Learning to support training for civil servants, • Implemented improvements to services identified including up to 2,500 recruits joining the Civil by a ‘customer journey mapping’ project, involving Service to support Brexit. over 130 customers and a similar number of staff working together in cross-functional teams and The project has now moved into business as usual and sponsored by Board members. is looked after by the Commons’ and Lords’ Procedural Practice Centres of Excellence. • Introduced a more encouraging approach to staff ideas, linked to the Continuous Improvement The Director General’s Programmes for 2017–18 team’s work. During 2017–18 we put a particular emphasis on our • Introduced a staff recognition scheme (Star), customers, our staff and the ways in which we work. which had previously run as a pilot. To help us make the transformational shifts we need – and to make them stick – we established three time- limited programmes, outlined below. The three Director General (DG) programmes are intended to work together to deliver cultural change. Annual Report and Accounts 2017–18

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In early 2018, our Head Chef, Laurence, and Chef de Partie, Daniel, took part in the annual Student Catering Forum at Havering College, to promote the benefits of pursuing a culinary career in our Catering Services team. Daniel is a former student of Havering College, and has recently won a gold medal award for the best main course in a nationally-recognised culinary competition. At the event, Laurence and Daniel gave an overview of their roles, explained the various professional development opportunities available to our employees, and fielded questions from the students. It was a great example of how the House is proactively engaging with young people Reaching as an employer, offering rewarding careers in a wide range of professional out to disciplines. prospective employees

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Fostering a skilled, united and diverse workforce • Being listed in Business in the Community’s ‘Best Employers for Race and Race Equality’ in People play a vital role in delivering the House Service November 2017. Strategy and people development remains a top priority. In autumn 2016, we established our People Programme • Reaching 23rd place in the Stonewall Workplace to raise the profile and impact of people development Equality Index in February 2018 (out of 430 employers), across the House, and to develop our capability to deliver a rise of five places from the previous year. our strategic outcomes. While the programme closed in 2017–18, the work continues as part of the mainstream • Receiving an ‘Autism Friendly Award’ from the activity within Corporate Services. Some of the outcomes National Autistic Society in recognition of the work during the year have included: staff had done to make Parliament more welcoming to visitors on the autism spectrum. This included • Holding our first-ever event for all line managers staff training and improving the information for in the House Service and Digital Service in the autistic visitors on Parliament’s website. Commons Chamber, in May 2017 • Holding our sixth annual Diversity and Inclusion • Expanding our ‘Career Connectors’ network Awards, where over 300 staff attended from the – a group of staff who act as informal points House of Commons and Digital Service to see of contact to advise on the skills required for nominations and winners of five different awards. different roles in their teams and advise on Ways of working development opportunities. The Ways of Working Programme was launched in July • Introducing a modular approach to management 2017. (It began later than planned due to recruitment development to enable a more tailored and issues and the 2017 General Election.) It is leading the accessible approach. development of new, more flexible and agile ways of working which will enable us to meet the challenges of the • Introducing coaching masterclasses and peer future, including Restoration and Renewal. The programme coaching networks to support people managers has two strands: ‘Smart Working’ and ‘One Story’. in adopting a coaching approach to people development. Although there were initial delays because of shifting accommodation priorities, the ‘Smart Working’ strand is • Expanding our talent management programme running 20 pilots, engaging more than 250 staff across the House Service in developing sustainable ways of An evaluation report of the pilot talent management working. Many pilots are increasing the opportunity for scheme was considered by the Commons Executive people to work away from the Parliamentary Estate, Board in January 2018, but it will take time before we whilst still providing excellent customer service. This can fully assess the impact of these initiatives. Feedback potentially enables people to reduce commuting time, from those participating in the pilot stage of the Talent and making it easier for those with disabilities or caring Management Programme has been very positive, and responsibilities to work here. A small number of pilots was used to help shape the expanded programme in have involved redesigning office space to provide 2018–19. Five of the 14 (36%) people participating in activity-based working environments which optimise the pilot have been promoted since the programme productivity and use of space. ended on 31 October 2017. Pilots are designed to make the most of new digital In addition to the People Programme, we have tools provided by Skype for Business and Office 365, undertaken other developments to improve the capacity as well as alternative mobile devices, collaboration and capability of our staff. We have improved our software and work-flow management tools to make project and programme management through the work processes and collaboration more flexible and efficient. of the Enterprise Portfolio Management Office (EPMO) Before the pilots started, a House-wide staff survey – one of our Centres of Excellence – with proportionate established a robust baseline of views and attitudes on and clear governance, to reduce bureaucracy and the way we work, including indicators for benchmarking duplication, learn from both successes and failures, and with other organisations. 84% of respondents welcomed ensure accurate and consistent reporting. efforts to develop our ways of working. The work of our Diversity and Inclusion Team is bearing The programme is collecting data on behaviours and fruit, and the House Service has achieved several attitudes across pilot teams. Digital behaviour and successes in 2017–18: space utilisation are monitored across most pilots, © UK Parliament Annual Report and Accounts 2017–18 Performance Report

36 and a rolling weekly survey of staff involved enables Reputation – In early Spring 2018 we piloted a small us to build an understanding of what works and set of questions put to an externally-managed panel of what does not. The data will underpin analyses and the public. In 2018–19 we will be building on this using recommendations from the programme at the end of monitoring undertaken by the Reputation Institute. September 2018. Impact – Each quarter we produce a case study The House Service is undergoing change at a greater to look at the impact of different aspects of select rate than ever before, and this sometimes creates committee and research work. We are reviewing uncertainty among staff and customers. A second strand the range of regular qualitative and quantitative of the Ways of Working Programme, ‘One Story’, has feedback mechanisms from visitors and those who developed a strategic story about our future direction, have engaged with Parliament – witnesses to select which is being rolled out across the House Service to committees, school visitors, those who have attended bring context to all the change and provide an inspiring chamber debates, and those who have interacted with vision for our staff. It is also developing a framework Parliament in other ways. There is the potential to to better coordinate communication and engagement benchmark this against data from the external panel to around change. help us judge how much difference we are making. The programme in its current form will conclude at Sustainability – This covers a very wide range of the end of September 2018 with a set of analyses and activity but are currently focusing on the following: recommendations to the Commons Executive Board for further development of new ways of working in the • Financial sustainability, where we monitor House Service. our spending and compliance with internal financial policies.

How performance is measured • People and workforce, where we look at There are three main strands to corporate performance headcount and FTEs, staff turnover and measurement: the performance framework, risk sickness absence. management, and portfolio reporting. • Environment, where we monitor our progress in achieving our long-term targets for carbon Performance framework reduction, recycling, waste and water usage. The performance framework is based around the four strategic outcomes. It is reviewed by the Commons Executive Board monthly and the Commission receives a highlight report each quarter. Satisfaction – We measure the satisfaction of different customer groups (Members, Members’ staff, the public and internal customers) across a range of different service areas such as procedural support, internal staff training, catering, tours and outreach work. In 2018– 19 we will establish a new, regular way of seeking feedback from Members and their staff about our services in a more structured manner. Performance Report Annual Report and Accounts 2017–18

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Risk management prevent the House Service from achieving its strategic goals. These are overarching risks rather than relating The Commons Executive Board owns a set of principal to specific objectives. Some minor changes were made risks that are reviewed and monitored on a monthly during 2017–18 but the risk register at the end of basis. These are focused on the things that would March 2018 was as follows:

Category Risk

Cyber security Cyber-attack against parliamentary systems causes serious disruption to the strategic plan objectives and to the work of Members and their staff.

Estate As a result of a loss of momentum across the various strands of Restoration and Renewal and NEP work before the transfer of the Parliamentary Estate to the delivery authority, the House Service has to deal with a failure of critical services while still in the Palace of Westminster.

Security Failure to keep secure the Parliamentary Estate, members, staff and visitors.

Information management The House fails to comply with data regulations and manage, protect or exploit its information adequately.

Joint working Differing approaches between the two Houses limits the ability of the House of Commons Service to achieve its strategic goals.

Digital The House Service fails to provide and maintain the right technology including a resilient digital network - to support Members and staff in their work.

Customer focus The House Service fails to provide the services to the quality required of both its internal and external customers.

HR The House Service does not have the right people capability, capacity or culture to deliver its strategic goals.

Reputation The House suffers a loss of reputation, at least in part through the action or inaction of House staff (including poor levels of performance), Members or their staff.

Finance The ineffective management of financial resources and contracts impacts on the House Service’s ability to achieve its strategic goals.

Member confidence Failures in maintaining and delivering our core services results in a loss of Member confidence which affects the House Service’s ability to achieve its strategic goals.

Change The House Service fails to manage the pace or impact of change across the business and this affects the ability of staff to deliver their core work and prevents the organisation from delivering its strategic goals.

In addition each team, along with individual projects programmes across the House Service. There are currently and programmes, maintain their own risk registers 18 programmes and another 13 standalone projects under to support management decision-making, develop way which together account for many millions of pounds of mitigations for key risks and escalating them where investment in helping to secure Parliament’s future. necessary. The Risk Management team in the Our Enterprise Portfolio Management Office (EPMO) Governance Office has oversight of all risk registers maintains oversight of all project and programme and advises on best practice. [See page 60 for more activity across both Houses of Parliament and the Digital information about the operation of risk management]. Service. It reports on project and programme activity to the Boards of both Houses (and the Joint Investment Portfolio reporting Board) to monitor progress and help ensure that the A significant part of achieving our strategic goals relies change the organisation wants is delivered. upon the successful delivery of various projects and Annual Report and Accounts 2017–18 Performance Report

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Other corporate reporting Supplier payment performance

Staff engagement In 2017–18 87.2% of supplier invoices were paid within 30 days of receipt. This is a reduction in the performance The House of Commons and Digital Service undertake level from 2016–17 when the figure was 91.7%. The regular staff surveys to obtain views and feedback from volume of invoices received in 2017–18 (41,117) was staff about their work experiences. The surveys aim to 1.5% higher than the 40,487 paid in 2016–17. In the help senior management understand what works well last part of the financial year a pilot was run to explore within the organisation, identify any potential areas of the impact of reducing the number of supplier payment concern, and where improvements can be made. The runs from twice per week to once per fortnight in Commons Executive Board is committed to encouraging January 2018, then once per week in February and engagement and investment in our staff; completing the March 2018. Invoice payment performance fell to surveys is an important part of developing the reputation 73% in January but recovered to 87.5% and 90.6% in and success of Parliament. February and March respectively. The pilot showed that Following a one-off ‘snap-shot’ survey in November 2016, satisfactory performance levels could be maintained with a new annual staff survey was launched in May 2017. weekly payment runs, and this frequency will continue Overall, the response rate was 61%, which was higher into the new financial year. Fortnightly payment runs had than the 2014, 2015 and 2016 surveys – 59%, 51% and an adverse impact on workflow in Financial Services and 58% respectively. in teams, and increased the need for special payments, which are both more time-consuming and expensive. Employee Engagement was calculated using the set of questions asked in the Civil Service People Survey, which Climate change, sustainability and the environment therefore allows for wider benchmarking. The Employee Engagement Index score for the House of Commons and This section follows – as far as possible and to the extent Digital Service was 67% – eight percentage points higher it is appropriate – the template and guidance issued to than across the Civil Service, although one percentage Government departments in HM Treasury’s Financial point lower when compared to 2016. Reporting Manual. All the data (including expenditure) relate to Parliament as a whole. 82% of staff said they were proud to be part of the House Service, which is 23 percentage points higher than the Civil Service equivalent, and two percentage points higher than the 2016 result. Staff in the House Service are significantly more likely than the Civil Service average to be advocates of the House Service and to have a strong personal attachment. The one area where results compared poorly to the public sector benchmark was satisfaction with working environment, where the House of Commons/Digital Service scored 12 percentage points lower. A significant proportion of the workforce moved to refurbished accommodation in May 2018. The next annual staff survey was undertaken in May 2018, with results due in July 2018. The Communications Office provides a range of accessible and innovative communications to maintain ongoing dialogue with colleagues across both Houses and the Digital Service. It promotes the work of the Commons Executive Board (previously the Board and Executive Committee) by communicating key decisions, providing strategic communications advice to leaders and supporting the senior leadership programme.

© UK Parliament/Mark Duffy Annual Report and Accounts 2017–18 Performance Report

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GREENHOUSE GAS EMISSIONS

2014–15 2015–16 2016–17 2017–18

Non-Financial Total Gross Emissions for Scopes 19,466 17,781 17,550** 16,343 Indicators 1 & 2. (tCO e) 2 Total Net Emissions for Scopes 4,502 4,623 10,760** 16,343 1 & 2. (i.e. less green tariffs)

Gross emissions Scope 3 business travel 1,264* 1,521 1,952 1,434

Related Energy Electricity: Non-Renewable 0.0 1.05 27.2 28.32 Consumption (million kWh) Electricity: Renewable 28.55 26.27 0.93 0 Gas 24.33 24.56 29.21 29.94

Financial Expenditure on Energy 4,263 3,835 3,996 4,020 Indicators (£’000s) Expenditure on accredited offsets 0 0 0 0 (e.g. GCOF)

Expenditure on official business travel 2,558* 4,632 5,398 4,734

Glossary

The following scopes of carbon dioxide (CO2) emissions are defined in HM Treasury’s Financial Reporting Manual:

Scope 1: Direct emissions of greenhouse gases Scope 2: Energy indirect emissions Scope 3: Emissions as a result of official business travel

tCO2e: tonnes of carbon dioxide equivalent kWh: kilowatt hours GCOF: Government Carbon Offsetting Facility

Notes:

* Information on carbon emissions scope 3 (business travel) and business travel costs for 2014–15 refers to the period 01/09/14 to 31/03/15 only due to a change in provider. ** Figures for carbon emissions for 2016–17 have been revised due to application of the 2017 grid conversion factors.

The main source of Parliament’s carbon dioxide Parliament had achieved a 30% reduction relative to its emissions is energy consumption across the Estate. 2008–09 baseline year, exceeding its target for the year. Parliament’s environmental improvement plan sets out a At the end of the financial year, the solar panels installed on range of actions that have been put in place to improve the Palace of Westminster were turned on. This will allow us energy efficiency, and is updated annually. to reduce the amount of electricity that we have to source Parliament’s total gross carbon emissions for 2017–18 externally to power the Parliamentary Estate. Parliament reflect the 2017 grid conversion factors provided by the was previously able to opt for a 100% renewable tariff Department for the Environment, Food and Rural Affairs under the Crown Commercial Services energy and utilities for reporting purposes. The 2018 grid conversion factors framework. Since August 2015, only a mixed-generation were not available at the time of publication. tariff has been available under this framework (This change does not affect our carbon footprint, however, since carbon Parliament’s long-term target is to reduce absolute carbon has always been calculated on the basis of the grid mix and dioxide emissions resulting from energy use by 34% by not a specific tariff). March 2021, relative to 2008–09 baseline levels. In order to meet this target, Parliament’s 2017–18 emissions should All projects and programmes are required to identify have fallen by 25.9% on baseline. By the end of 2017–18, environmental impacts to identify potential carbon savings. Performance Report Annual Report and Accounts 2017–18

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Achieving a reduction in Parliament’s direct carbon encourage reductions in our supply chain. Parliament emissions continues to be a priority, but where is working to develop a method to assess carbon appropriate, procurement specifications are used to emissions from its supply chain.

WASTE

2014 –15 2015–16 2016–17 2017–18

Non Financial Total waste 1,929 1,467 1,778 1,959 Indicators (tonnes) Hazardous waste Total 2 4 4 7 Non hazardous Landfill 0 0 0 0 waste

Reused/ Recycled/ 1,205 918 1,136 1,230 Recovered

Incinerated/ 723 549 641 728 energy from waste

Financial Total disposal cost 440 561 539 415 Indicators (£’000s) Hazardous waste N/A* N/A* 7** 16 - Total disposal cost**

Non hazardous Landfill 0 0 0 0 waste - Total disposal cost**

Reused/Recycled N/A* N/A* 89** 207

Incinerated/ energy from waste N/A* N/A* 73** 191

Notes:

* Parliament’s previous waste contract did not break down costs by waste stream, but was priced on the basis of an aggregation of standing charges, costs per collection and per tonne. There was no breakdown of annual costs of hazardous and non- hazardous wastes. **Information on figures for the hazardous waste and waste costs are from 1 November 2016 when a new waste contract commenced. 2016–17 figures have been restated.

Parliament continues to prioritise a reduction in waste and refurbishment activities (for example, Canon Row generation and improvements in recycling rates, and, refurbishment and the Northern Estates Programme). where appropriate, procurement specifications are used to encourage the supply chain to improve performance in these areas. Parliament’s long-term target is to reduce the amount of waste it generates (measured by weight) by 30% by 2020–21, relative to 2008–09 baseline levels. In order to meet this target, waste should have been reduced by 24.0% against the baseline by the end of 2017–18. The actual figure achieved was 8.5%. This is due to a number of factors, including the growing number of people working within, and visiting, the Parliamentary Estate, and the increase in construction Annual Report and Accounts 2017–18 Performance Report

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Waste audits have taken place and training on the waste stream. This will be achieved, for example, by segregation of waste has been undertaken with those cutting down on unnecessary printing. responsible for transferring and consolidating waste on Revised procedures will be implemented to incorporate the Estate. The final disposal of waste streams follows the environmental impact of packaging into the best practice against the waste hierarchy. weighting of relevant procurement and tender Parliament will be introducing a new scheme during the exercises. These procedures will incentivise suppliers to coming financial year to divert food and compostable reduce the amount of single-use packaging, including disposable items from its general waste stream. Current avoidable plastics used for delivering their goods and work to replace or eliminate single use plastics will services, leading to a reduction of waste. include replacing single use packaging with reusable Parliament operates with a zero waste to landfill policy. alternatives. Additionally, a new initiative will be Its general office waste is disposed of by incineration at implemented across the Estate to reduce paper waste, an energy-from-waste facility. the primary constituent of our dry mixed recycling

FINITE RESOURCE CONSUMPTION – Water

2014–15 2015–16 2016–17 2017–18

Non-Financial Water Supplied 145,200 116,176 91,567 76,958 Indicators (m3) Consumption Abstracted 88,641 82,010 94,793 107,055

Financial Water Indicators Supply Costs 383 275 204 324 (£’000s)

Smart water meters have been installed across the Information rights (Freedom of Information) Parliamentary Estate which enable the Environment In 2017–18 the House of Commons replied to 539 Team to closely monitor water usage, requests for information which were handled under highlighting leaks and identifying instances of either the Freedom of Information (FOI) Act or the high consumption requiring urgent action. This has Environmental Information Regulations. We met the contributed to the reduction in water usage. The long-term statutory response deadlines in 97.4% of these cases. target for water use is to reduce the volume used by 50% Where some or all of the information is disclosed, we by March 2021, relative to 2008–09 baseline levels. In order publish selected responses, especially if they are topical to meet this target, Parliament’s 2017–18 water use should or repeated. We also publish all responses that contain have fallen by 38.6% against the baseline. The actual figure datasets, in accordance with our obligations under the achieved was 43.8%, putting Parliament on course to meet Protection of Freedoms Act 2012. These can be viewed our long-term target. on our disclosure log on the Parliament website at Parliament continues to prioritise reduced water use. In www.parliament.uk/site-information/foi/foi-and-eir/ addition, where procurement exercises have a potential commons-foi-disclosures Our main FOI page at impact on water use, specifications are used to www.parliament.uk/site-information/foi contains encourage the supply chain to improve water efficiency. information about our publication scheme, how to During the forthcoming refurbishment projects, make an FOI request and our transparency publications. the Environment Team will attempt to ensure water supplies are isolated wherever possible. Performance Report Annual Report and Accounts 2017–18

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Health and safety Auditors We place great importance on protecting the health The Comptroller and Auditor General audits the and safety of all those who visit or work in our financial statements of the House of Commons premises. The Parliamentary Estate has a wide and by agreement. complex safety risk portfolio. In addition to being His certificate and report is included in the accountson the place of work for Members of both Houses, pages 85–87. The external audit cost of the House was their staff, and staff of both Houses, Parliament is a £85,000 represented as a notional charge. Further major tourist attraction. There is also a diverse events information is provided in Note 3 to the accounts. programme, including cultural exhibitions, weddings and film making. There are significant demands on accommodation and an extensive programme of construction and maintenance activities. All of these activities are co-located in a relatively compact location and potential safety risks need to be carefully managed. In 2017–18, 246 incidents and near misses were reported to the Parliamentary Safety Team, five requiring notification to the Health and Safety Executive under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR). Just over half of these incidents resulted in an injury; the most frequently reported cause was as a result of a slip, trip and/or fall, which is in keeping with the national picture. 102 “near misses” were reported, i.e. narrowly-avoided accidents where no injury or damage occurred; in the region of 50% of these were caused by ‘premises faults’ – damaged flooring, poor lighting, wet floor etc. Incidents involving premises faults are forwarded to the Parliamentary Maintenance Service Team for repair. Six of the incidents were classified as having the potential to cause serious harm:

• A section of suspended ceiling collapsed during cabling work.

• A piece of corrugated metal roof covering blew onto the Terrace from scaffolding above. • A car windscreen was smashed by falling masonry.

• An excavation in the car park was found to be unsafe.

• A gas leak occurred.

• A live cable was struck during drilling work.

All of these incidents were thoroughly investigated by the Parliamentary Safety Team and remedial action was taken as appropriate.

Sir David Natzler KCB, Accounting Officer, House of Commons

13 July 2018 Annual Report and Accounts 2017–18 Accountability Report

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02 Accountability Report

Corporate Governance 46 Remuneration and Staff Report 66 Parliamentary Accountability 77 and Audit Report Parliamentary Accountability Disclosures 84 Certificate and Report of the Comptroller 85 and Auditor General to the House of Commons © UK Parliament/Mark Duffy

Annual Report and Accounts 2017–18 Accountability Report

46 Accountability Report

Corporate Governance

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

• Include judgements and estimates made on a reasonable basis.

• State whether applicable accounting standards, as set out in the Financial Reporting Manual as applied by the House of Commons, have been followed, and disclose and explain any material departures in the accounts.

• Have been prepared on a going concern basis. Accountability Report Annual Report and Accounts 2017–18

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Governance Statement10 In recent years the Governance framework of the House has undergone substantial changes, following the report of Introduction the House of Commons Governance Committee and the As Accounting Officer, I am required to prepare subsequent House of Commons Commission Act 2015, an annual governance statement. This statement as well as changes arising from an organisational review records the stewardship of the House of Commons conducted by the Director General. This year saw a further Administration, drawing together evidence on change following a review of the operating arrangements governance and risk management. The statement of the Commons Board, which resulted in the Executive is intended to give a sense of both the House of Committee and the Commons Board combining to Commons Administration’s vulnerabilities and also how become the Commons Executive Board. This was agreed the organisation has coped with the challenges it faced by the Commission on 20 November 2017. during the year. The Commons Executive Board is accountable to the Commission for the delivery of the strategy for the House Governance framework of the House of Commons Service and also manages the day to day operation The House of Commons Commission is the ultimate of services. During the year, the Commons Executive authority for the administration of the House, but day- Board held meetings on a fortnightly basis. As a result to-day management of the organisation is delegated to of the recommendations of the review of the Board, the House of Commons Executive Board. As Accounting the membership was changed to comprise the heads of Officer, I am mindful of HM Treasury’s guidance on Teams, the Clerk of the House and the Director General. the scope of the governance statement as it applies There have been no major changes to the organisational to government departments, but I emphasise that the structure during the year. The structure is comprised of House’s constitutional and governance circumstances the eight broad functional areas – six Teams and two are different to those of government departments. supporting offices – which were recommended in the Likewise, the extent to which the House Service is Director General’s Review. able to follow the Treasury’s Corporate Governance Code will differ. Significant variations from the Code include the fact that the Commons Executive Board is not equivalent to the single management board of a Whitehall department. I am content that the House Service’s structure meets the overall objective of separating policy and operations, and that the necessary element of non-executive challenge and scrutiny is available through the external members of the Commission and the Administration Estimate Audit and Risk Assurance Committee.

10 The House of Commons Members’ Estimate is the subject of a separate Governance Statement published with the House of Commons Members’ Annual Accounts. Annual Report and Accounts 2017–18

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

House Service * Jointservice withtheHouse ofLords Administration Committee Committee Speaker’s Chamber and Chamber and Finance Committees Office In-House Services

Communications Participation Supports Advises

Advises

Delegates power to Executive Board Commission Research and Research and Commons the House Information Corporate The Speaker Director Speaker General Clerk of Chairman: Services Chairs Chairs Attends

Manages Appoints Governance Strategic Strategic Estates Advises Advises

Assures Consultative Panel on Parliamentary Parliamentary Parliamentary Parliamentary Administration Art Committee Department Audit &Risk Service* Committee Security Security Assurance Digital Works of Estimate Security

Annual Report and Accounts 2017–18 Accountability Report

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How the House is Governed Estimate Audit and Risk Assurance Committee is provided in their annual report (page 122). The House of Commons Service is governed by the Commission, which is chaired by the Speaker. The Organisational structure of the House of Commission sets the strategic framework for the Commons Service provision of services to the House, Members and to the The House of Commons Service comprises seven House of public, signs off the annual budget (the Estimate) for the Commons Teams (departments), the Parliamentary Digital House, and is the legal employer of House Service staff. Service (a joint department of the House of Commons and Until November 2017, the Commission delegated day- the House of Lords) and two smaller offices. to-day management to the Executive Committee. The The new organisational structure comprises the Executive Committee was supported by the Board in following Teams, a number of which provide shared fulfilling its delegated responsibilities. From December services to the House of Lords: 2017, the Executive Committee and the Board were replaced by a single body, the Commons Executive Board. • Chamber and Committees The Commission is supported by two Select Committees • Research and Information of the House which act as advisory bodies to the Commission. The Administration Committee, chaired • Participation by Sir Paul Beresford MP, recommends improvements to services. The Finance Committee, chaired by Chris Bryant • In-House Services MP, considers expenditure and the House’s budgets. • Parliamentary Security Department The Commission is also supported by the Administration • Corporate Services Estimate Audit and Risk Assurance Committee (AEARAC)11. The AEARAC supports the Accounting Officer in • Strategic Estates discharging his responsibilities under the Administration Estimate, particularly with regard to the maintenance of • Communications Office an effective system of internal control. Since April 2017, • Governance Office the Committee has also had an enhanced role in providing independent assurance to the Commission, and to the • Parliamentary Digital Service Accounting Officer, that the system of risk management (a joint department with the House of Lords) is operating effectively and that risk is being effectively managed by the organisation and monitored by the In addition, the House of Commons Service is supported Commons Executive Board. The Committee also has by the Parliamentary Procurement and Commercial oversight of the work of Internal Audit and the external Service, a shared service based in the House of Lords audit carried out for the House by the Comptroller and Finance Department, and the Parliamentary Archives, Auditor General. More detail about the Administration also based in the Lords.

11 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 [HC 1382]. © UK Parliament/Mark Duffy Accountability Report Annual Report and Accounts 2017–18

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House of Commons Commission

Under the House of Commons (Administration) Act 1978 (as amended by the House of Commons Commission Act 2015), the House of Commons Service is overseen by the House of Commons Commission. The membership of the Commission during 2017–18 was:

Name Served Attendance

The Rt Hon John Bercow MP; Speaker (Chairman, by virtue of office) full year 14/14

The Rt Hon David Lidington MP; Leader of the House of Commons until 11 June 1/1 (by virtue of office) 2017

The Rt Hon Andrea Leadsom MP; Leader of the House of Commons from 11 June 12/13 (by virtue of office) 2017

Sir Paul Beresford MP full year 12/14

Rt Hon Tom Brake MP full year 10/14

Rt Hon Dame Rosie Winterton MP full year 14/14

Valerie Vaz MP full year 14/14

Stewart Hosie MP full year 13/14

David Natzler; Clerk of the House (by virtue of office) full year 14/14

Ian Ailles; Director General of the House of Commons (by virtue of office) full year 12/14

Dame Janet Gaymer,12 external member13 full year 14/14

Jane McCall, external member13 full year 13/14

12 Dame Janet is the Chair of the House of Commons Administration Estimate Audit and Risk Assurance Committee. 13 External members are not voting members of the House of Commons Commission Annual Report of the House of Commons Commission

The Commission met 14 times during 2017–18. Minutes of Commission meetings – the ‘Decisions’ – are published on its pages on the Parliament website14. During the period covered by this report the Commission dealt with a range of administrative and financial matters including:

• Agreeing Votes on Account and Estimates for • Endorsing the 2017 dissolution guidance. 2018–19. • Endorsing the creation of a single Commons • Agreeing Supplementary Estimates for the Executive Board in place of the Executive Members Estimate 2017–18. Committee and the Board.

• Agreeing the pay remit for 2018–19. The Commission is supported by two Select Committees • Endorsing the Corporate Business Plan 2018–19. of the House: the Finance Committee and the Administration Committee, which act as advisory bodies • Agreeing steps to improve parliamentary cyber security. to the Commission. Sir Paul Beresford MP chairs the • Endorsing the proposals of the Director of the Administration Committee, and is also a backbench Parliamentary Security Department in response to member of the Commission. Chris Bryant MP chairs the the recommendations made in the Murphy Review Finance Committee. of perimeter security. The Commission is also supported by the Administration • Agreeing that the Clerk as Corporate Officer should Estimate Audit and Risk Assurance Committee. award the contract for the refurbishment of the Membership of the Committee currently comprises the Elizabeth Tower. chair of the Administration Committee, a member of the Finance Committee (Mr Clive Betts MP), one of the • Endorsing a change in direction in the Northern backbench members of the Commission (Rt Hon Tom Estate Programme and Richmond House from a Brake MP), the external members of the Commission limited refurbishment to a legacy building project (one of whom, Dame Janet Gaymer, chairs the inside the secure perimeter. Committee) and an independent expert member (Bob Scruton). The Committee advises the Commission • Agreeing the governance arrangements for the and the Accounting Officer and has oversight of the Restoration and Renewal Programme. work of Internal Audit and the work carried out for the • Agreeing the proposed approach to a Gender- House by the National Audit Office. Since April 2017 Sensitive Parliament audit in 2018. Since April 2017 the Committee has been providing • Agreeing to streamline the process for those in assurance to the Commission, and to the Accounting the House Service pursuing bullying or harassment Officer, that risks are being effectively managed by the complaints as well as other grievances. organisation and monitored by the Commons Executive Board. More detail about the Administration Estimate • Agreeing plans to implement the recommendations Audit and Risk Assurance Committee is provided in the of the Cross Party Working Group on an Governance Statement and in their own annual report Independent Complaints and Grievance Policy. (page 102). Agreeing to the initiation of an inquiry into the bullying and harassment of House staff to be set up by the Non-Executive members of the Commission.

• Approving updated remits for the Finance and Administration Committees, and proposals to improve communication between the Domestic Committees and the Commission.

14 www.parliament.uk/business/committees/committees-a-z/other-committees/house-of-commons-commission/minutes Accountability Report Annual Report and Accounts 2017–18

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Executive Committee The Board The management of the House Service and its operations Until 30 November 2017, the Board was responsible for was previously delegated by the Commission through the delivery of the House’s strategic objectives, the efficient and an Instrument of Delegation to the senior officials who effective conduct of business, regular performance and risk formed the House of Commons Executive Committee. management, and addressing operational issues. The Board’s Membership of the Executive Committee from 1 April to membership between 1 April and 30 November 2017 was: 30 November 2017 was: • Ian Ailles, Director General of the House of • Ian Ailles, Director General of the House of Commons (Chair) Commons (Chair) • David Natzler, Clerk of the House (by virtue of office) • David Natzler, Clerk of the House • Myfanwy Barrett, Managing Director of Corporate • Myfanwy Barrett, Managing Director of Corporate Services and Director of Finance Services and Director of Finance • Carlos Bamford, Managing Director, In-House Services

The Clerk is Accounting Officer, Corporate Officer • John Benger, Clerk Assistant and Managing Director, and Data Controller, and responsible for ensuring Chamber and Committees proper stewardship of resources and for maintaining an appropriate system of internal controls. He issues • Brian Finnimore, Managing Director, Strategic Estates delegation letters to the heads of each Team of the House • Penny Young, Librarian and Managing Director, on appointment, and they receive an annual budget letter. Research and Information and Participation They submit to him an annual letter of assurance, setting out how they have ensured the effective and efficient • Rob Grieg, Director of the Parliamentary Digital management of the responsibilities delegated to them and Service (until 8 September 2017) their Team by the Clerk. • Tracey Jessup, Director of the Parliamentary Digital Until 30 November 2017 the Executive Committee was Service (from 9 September 2017) accountable to the Commission for the delivery of the • Eric Hepburn, Director of Security for Parliament strategy for the House Service. Day-to-day operation of services was managed on behalf of the Executive • Lee Bridges, Head of Communications Committee by the Board (see below). The Executive Committee and Board supported the Corporate Officer • Marianne Cwynarski, Head of the Governance Office and Accounting Officer in meeting his statutory duties. • Annette Toft, Leader, Ways of Working Programme

The Executive Committee met quarterly to hold the Board • Patsy Richards, Leader, Customer Programme to account for the performance of the organisation and to provide assurance on risk. The agendas and minutes • Edge Watchorn, Leader, People Programme of these meetings are published on the UK Parliament 15 website . Decisions of the Board for the period up to 30 November 2017 are published on the Parliament website16. The Board monitored the performance of the House Service principally through monthly consideration of data on performance against corporate key performance indicators, the delivery of key milestones outlined in the Corporate Business Plan for 2017–18, the financial health of the organisation, monthly reports of the performance of major projects and programmes, and the status of principal risks. The Board agreed policies to enable the delivery of the corporate strategy, held quarterly meetings to focus on individual strategic outcomes and commissioned a review of governance arrangements.

15 www.parliament.uk/mps-lords-and-offices/offices/commons/executive-committee/executive-committee-publications/executive-committee-papers 16 www.parliament.uk/mps-lords-and-offices/offices/commons/the-board/board-decisions/previous-boards/the-board Annual Report and Accounts 2017–18 Accountability Report

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Commons Executive Board • To assist the Finance Committee in the preparation of the Estimates and of other papers relating to In the autumn of 2017, a review of governance those Votes, before their submission to the House arrangements was undertaken by the Governance of Commons Commission; and to carry out such Office with the aim of delivering clearer, more other functions relating to the expenditure on the streamlined, better joined-up governance for the House administration of House of Commons services as of Commons Service. One of the key recommendations may from time to time be allocated to it by the was the creation of a single Commons Executive Board Commission. in place of the Executive Committee and the Board. The recommendations were endorsed by the Commission, • To fulfil the statutory responsibilities delegated and a revised Instrument of Delegation was agreed to to it by the House of Commons Commission in give formal effect to these changes at its meeting on relation to the employment of House staff. 20 November 2017. The membership of the Commons • To direct the House of Commons Service, deciding Executive Board from 1 December 2017 to 31 March policy and operational issues as delegated to it 2018 was as follows: by the Commission, the Speaker or the Clerk, managing performance KPIs and driving efficient • Ian Ailles (Chair) use of resources. • David Natzler, Clerk of the House • To provide assurance to the Administration (by virtue of office) Estimate Audit and Risk Assurance Committee on • Myfanwy Barrett, Managing Director of the management and mitigation of risk. Corporate Services and Director of Finance • To support the Clerk in the exercise of his/her • Carlos Bamford, Managing Director, responsibilities as Corporate Officer, Accounting In-House Services Officer and Head of the House of Commons Service, and to support the Director General in the • John Benger, Clerk Assistant and Managing exercise of his/her responsibilities. Director, Chamber and Committees

• Brian Finnimore, Managing Director, The Commons Executive Board is committed to creating Strategic Estates a unified House Service, listening to staff and involving • Penny Young, Librarian and Managing Director, senior leaders through the Strategy Delivery Group and Research and Information and Participation the Commons Leadership Forum. Its members are not simply there by virtue of running a Team or functional • Tracey Jessup, Director of the Parliamentary area. It is also committed to working in partnership with Digital Service the House of Lords Management Board.

• Eric Hepburn, Director of Security for Parliament Decisions of the Commons Executive Board (from 1 December 2017) are available on the UK Parliament The Commons Executive Board provides leadership website17. for the House of Commons Service. It acts as a sub- committee of the Commission and is accountable to it. Its responsibilities are:

• To assist the Commission in setting strategic objectives for the House of Commons Service, and to be accountable to the Commission for the delivery of the strategy.

17 www.parliament.uk/mps-lords-and-offices/offices/commons/the-board/board-decisions/ceb-decisions © UK Parliament/Mark Duffy Annual Report and Accounts 2017–18

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Sub-groups of the Commons Executive Board The Commons Executive Board has seven sub-boards, six of which are bicameral (with the House of Lords). Powers are delegated to these groups, and, where necessary, decisions are referred from the groups to the CEB:

Bicameral • The Parliamentary Safety Assurance Board provides leadership and oversight of fire and • The Business Resilience Group directs and safety management. Joint Chairs: Director of reviews business resilience policy, strategy and Facilities, House of Lords, and Head of the implementation across both Houses. Chair: Governance Office, House of Commons. Managing Director, In-House Services, House of Commons. • The Parliamentary Safeguarding Board, which ensures that appropriate safeguarding practices • The Digital Strategy Board is responsible for and procedures are in place for the young people monitoring the delivery of the Digital Strategy for and vulnerable adults who visit Parliament or Parliament. It supports the work of the Digital who engage with Parliament through outreach Service, in ensuring that digital delivery is at the activities. Chair: Clerk Assistant, House of Lords. forefront of Parliament’s work. Chair: Clerk of the , House of Lords. Commons only • The Information Authority helps to ensure • The Senior Remuneration Committee, which makes that information can be found, accessed and recommendations to the Clerk of the House on shared appropriately and securely, and can be pay for staff in the Senior Commons Service (House understood, used and trusted over time. The of Commons and Digital Service only). Chair: Authority owns and makes decisions on matters Bronwen Curtis (external appointment). of cyber security. Chair: Managing Director, Research and Information, House of Commons.

• The Joint Investment Board helps to develop the Medium Term Investment Plan and monitors delivery of major investment programmes. Chair: Director General, House of Commons. © UK Parliament/Mark Duffy Annual Report and Accounts 2017–18 Accountability Report

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System of Internal Controls At the beginning of the year, ten principal risks As Accounting Officer, this governance statement were identified linked to the 2017–18 Corporate represents my assurance that I am satisfied that the Business Plan giving oversight of risk in the following organisation’s system of internal control is effective. areas: security, loss of reputation, relationship with Member bodies, differing interests between the two The House Service has policies and procedures that Houses, information management, people capability underpin its governance arrangements. These include and capacity, financial management, digital, lack rules and guidance on finance and procurement, a Staff of customer focus and Restoration and Renewal. Handbook which sets out HR policies and practices and a During the year, elements of the principal security risk mandated system of risk management. All managers are materialised and were subject to three major reviews, required to be familiar with, promote and comply with the Murphy and Moody reviews commissioned by these policies and procedures. the Speakers and Clerks of both Houses following The House has a system of risk management which the terrorist attack in Westminster on 22 March 2017 is reviewed annually by Internal Audit. My review of and the Ashton Review commissioned following the effectiveness describes work that has been undertaken cyber-attack on all parliamentary user accounts on 23 this year to address issues previously raised by internal June 2017. All recommendations from the reviews have audit activity and to address risks that materialised been considered and management action plans are in during the year. place, and have included the creation, in July 2017, of a new principal cyber-security risk. Under the current governance arrangements for risk management, the House of Commons Commission is Over the year, the Commons Executive Board continued responsible for the strategic overview of the House of to regularly monitor and review its risks, as part of its Common’s risk management system, which includes regular review of performance and risk. In November oversight and review of the principal risks18. The 2017, the Risk Team, supported by the new Head Commission also undertakes regular ‘horizon scanning’ of Internal Audit and Risk, commenced work with to ensure that the House identifies and monitors the Board on strengthening the reporting of risk areas of concern which may affect or impact upon management and to improve the mechanisms for the delivery of the corporate strategy. The Commons reviewing and challenging risks; this work included Executive Board is responsible for providing internal streamlining the reporting of risk by using a simple, oversight of the risk management system and for more visual format to help facilitate a strategic providing assurance to the Commission on how the level of discussion. In addition, the Enterprise organisation is managing its risks. The Administration Portfolio Management Office (EPMO) is leading the Estimate Audit and Risk Assurance Committee is improvement of Risk Management across Parliament’s responsible, under their terms of reference, for portfolio of projects and programmes, supported by reviewing governance, and the systems and processes portfolio and programme offices and has drawn up by which risk management and internal control are a Risk Assessment and Management Framework for undertaken by the House Service and for providing Programmes and Projects. assurance to the Commission that risk is being managed effectively by the organisation.

18 Principal risks are those risks that are either immediate impact risks to the organisation’s ability to continue operating e.g. loss of customer data, or slowburning risks that grow and eventually prevent delivery of objectives e.g. staff turnover or leadership capability. Management of Risk in Government – January 17 page 7 Accountability Report Annual Report and Accounts 2017–18

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Review of effectiveness of the performance of management that is the issue. The control weaknesses that have led to this conclusion The evidence base are explained in the findings on effectiveness below. As Accounting Officer, I have responsibility for reviewing the effectiveness of the system of Internal Controls. Findings on effectiveness In order to undertake this review, I have obtained evidence of the organisation’s effectiveness through a In this section I review the evidence about the variety of means. The most important are: the annual organisation’s effectiveness. As I set out in the letters of assurance from each Head of Team and introduction, the past 12 months have been particularly the Parliamentary Digital Service; separate letters of challenging for the House Service given the terrorist assurance on security, on information security (from the attack, the cyber-attack, reports of bullying, harassment Information Authority), on business resilience (from the and sexual harassment within Parliament, and the calling Business Resilience Group), on projects and programmes of a snap General Election. This section provides detail (from the Joint Investment Board), and on health and on efforts to address outstanding and emerging issues. safety (from the Parliamentary Safety Assurance Board); the Director of Internal Audit’s annual report and Governance opinion; advice and reports from the Administration When the Director General’s review was published in Estimate Audit and Risk Assurance Committee; and April 2016, it established that this was only the first reports from the external auditor. The letters from Heads step towards making the House Service an organisation of Team were subject to internal challenge and review which is used to and expects to be regularly reviewed. by the Governance Office and the Corporate Services As with other organisations, we have to be self- team. In addition, account has been taken of the critical and responsive to change whether internally or monthly corporate performance and risk reports and the externally driven. Therefore, in October 2017 the House information gathered from detailed feedback interviews of Commons Commission agreed to the with both Members and Members’ staff. The Head of Internal Audit concluded in his annual report and opinion that the governance, risk management, and control (GRC) processes in place are generally adequate for the purposes of the House of Commons, but there are significant weaknesses in the operation of aspects of the control environment that indicate issues in relation to the effectiveness of delivery of the framework. Consequently, the House is exposed to some degree of risk, and the level of assurance that he can offer is a Limited one. Overall the extent to which the information available leads to a Limited as opposed to Moderate opinion is relatively marginal. The Head of Internal Audit has emphasised the extent of progress that management has made in regard to the GRC framework over the year in question, particularly governance, compliance and risk management. In the audit of Key ICT controls, while overall being rated ‘limited’, those conducting the audit noted a distinct qualitative improvement in the approach been taken by management in relation to the control environment compared to previous years. The general picture is one of improvement across the board; however, in some crucial areas, such as safety, management need to take action to improve the operation of the control environment. In general, governance, risk management activities, processes and controls are in place and adequate; however, in some areas it is the effectiveness Annual Report and Accounts 2017–18 Accountability Report

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Board’s proposal to merge the Executive Committee rates of over 95% in relation to annual safety and and the Board into one single body with a smaller security training, the induction of new joiners, the overall membership. The return to a smaller Board completion of Individual Performance Reviews and membership is more consistent with best practice, the registration of staff interests. This has been aided and came at a time when the programmes that were by a united and determined message from Board key to implementing the initiatives coming out of the members, which has been cascaded to senior leaders Director Generals’ Review had neared completion. As and which staff have consistently acted on. The the Customer, People and Stepping Up Programmes are Business Management Directors have also played now integrated into our core business, the Programme an instrumental role in supporting the changes and leaders are no longer Board members. Additionally, improvements we have sought. However, I am aware we found that having a separate Board and Executive that there are still improvements to be made to our Committee did not work as we expected. In practice management information in this area, and there are we wanted to involve Board members in key decisions a number of key policies that are not covered by and we know the organisation found the separate ‘the Essentials’ that our staff should be periodically role of the Executive Committee confusing. I hope reminded of. Work is ongoing to address these issues, that this more streamlined structure will make for and I am assured that further progress will be made in better governance and be clearer and simpler for those the coming year. seeking decisions. Board members agree that the new Commons Executive Board is working better, but I am Financial management conscious that this change has made the Board less In recent years, significant investment has been made diverse. It will be kept under review. to improve the finance function to raise awareness and standards in the House. A key part in improving Risk management standards and the culture of financial management has In the last year, several of the principal risks we had been both the regular financial challenge meetings and identified have materialised.The crystalisation earlier the finance business partner model. I am pleased that in the year of our security and cyber-security risks had the benefits of this investment are being seen. Across an immediate impact to our ability to operate, but the the House this year there has been better monitoring House was able to resume business the next sitting day. of budgets with the bedding in of quarterly challenge This gives me some assurance that the procedures we meetings. Additionally, through the Finance Business have in place to mitigate these risks are correct. We Partners, Teams have surrendered budgets which has have also addressed the consequences and sought to led to better management of the in-year position learn lessons from these events which should help us to supported by mid-year change control notices issued to mitigate risks in future and to better prepare ourselves all Teams to reflect new budgets. The overall resource to deal with handling similar incidents. More recently underspend hides this improved performance as in our reputation risk materialised, with a less immediate most areas resource expenditure is broadly in line with impact, but which could prevent the delivery of our budget. A decision was made not to surrender allocated objectives. In the past year we have made further budget due to uncertainties about the accounting improvements to our system of risk management, treatment of the Richmond House transfer. With regard as our principal risks have been challenged at the to capital expenditure, the underlying underspend is Commons Executive Board, and we have sought similar to last year despite having returned some of our independent assurance from the AEARAC. allocated budget, which related to decisions around the Restoration and Renewal of the Palace of Westminster Compliance and the Northern Estate Programmes. Improvements Following initial work by the Internal Audit Team can still be made in the financial management of capital in 2015, which was taken forward as part of the projects and programmes, and the Enterprise Portfolio Stepping Up Programme, the organisation has sought Management Office have been working to achieve to address staff understanding of compliance issues this by providing support in relation to business case across the House Service. I am pleased that significant training, development and guidance. I expect to see the improvements have been achieved, principally through impact of these measures in the coming years. ‘the Essentials’, a set of mandatory actions that all The improvements that have been seen have been led staff are required to complete. These are now well by the Corporate Services Team. Additionally, I was established and are embedded into annual reporting pleased that a recent internal audit of the adequacy and processes. As a result, we are achieving compliance Accountability Report Annual Report and Accounts 2017–18

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effectiveness of key financial processes gave substantial next few months. These demands have put pressure assurance that the key controls are operating effectively, of some Teams, particularly Corporate Services, and and that in an audit covering approximately forty separate implementing the recommendations of the Working process and specific control points there was only one Group will require additional resource. We are issue of note. This reflects the efforts made by that Team, determined that through this priority undertaking our and shows that the control environment is strong. workplace should be free of bullying and harassment, and we will learn from where things have gone wrong Procurement and contract management in the past. The unified Parliamentary Procurement and Commercial Throughout the year, we have found some specialist Service (PPCS) has supported the procurement activities roles difficult to recruit to, such as within the Enterprise of both Houses since 2014. The Service has increased Portfolio Management Office and Internal Audit. the capacity and expertise of both Houses’ procurement In some Teams, such as Strategic Estates, there and contract management function as well as making have been difficulties in competing with the wider it easier to identify and realise opportunities for savings recruitment market, but I am pleased that the Digital through tendering for contracts that cover the Commons Service have been able to recruit the staff they need and the Lords. Demand on this service has been by emphasising the range of opportunities which rapidly increasing over the years as the House refreshes make Parliament an appealing place to work. For our its day to day service provision contracts, and takes existing staff, I am keen that we do more to promote steps to ensure all historic contracts are reviewed for career development across the House Service, that we compliance. The work of the Service has also influenced encourage greater learning and development on the positive cultural changes in relation to diversity and job, that we better identify and develop talent at all inclusion and other social and economic sustainability levels of the organisation, that we commit to improving objectives across Parliament. It has also promoted wider our management and leadership capability and that we public engagement more generally, and improved the support staff to take individual responsibility for their reputation of each House externally. However, I am own progression. The People Programme has supported aware that there are weaknesses in relation to our us on all these fronts over the past year and will contract management function, and the Director General continue to do so now it has become business as usual has made improvements a priority. This has resulted in within the Corporate Services Team. action being taken to improve the standard of contract management and ensuring that contract managers Security understand their role. The Director of In-House Services, Since last year, when Parliament and the Westminster whose Team is responsible for the management of area was subject to a terrorist attack from a lone the widest range of contracts, has been appointed as assailant, the terrorist threat has remained high and Contract Management Champion, and is taking forward has been kept under review. Following that attack, the Contract Management Improvement initiative which a full external review of perimeter security was will seek to establish consistent practice and improve commissioned, and its recommendations have or will capability in line with industry standards. be fully implemented. A follow-up review of their implementation thus far will take place during 2018. People management Much of the response to the review will be achieved Following a number of allegations of bullying and through the multi-year Security Programme, which harassment, including sexual harassment, there has has required substantial resourcing and has been been a need to reflect on how we tackle these issues. prioritised above other projects. This year saw the Where the allegations have concerned Members and project to provide support for Members away from the Members’ staff, the House has resolved to introduce Estate become ‘business as usual’ within the Members’ an Independent Complaints and Grievance Policy. Security Support Service, and the feedback received Additionally, the House of Commons Commission has been largely positive. During the year, new-style established an Independent Inquiry under Dame Laura passes have been issued for Members of both Houses Cox into the bullying of House staff, following the to assist recognition and deter forgery, and these will public testimony of some of our own staff. A number be rolled out to parliamentary staff and other users as of staff have initially assisted the Working Group on existing passes expire. It has been necessary at times an Independent Complaints and Grievance Policy this year to raise the screening level for mail temporarily and are now working to deliver this policy over the for individual Members. In these circumstances, consent Annual Report and Accounts 2017–18 Accountability Report

62 was sought from the Member for whom the additional No other incidents reported were judged to be significant protection was felt necessary. The experience of this enough and did not meet the threshold of being reported year, and since 2014, has reinforced my view that to the ICO. bringing in-house the Metropolitan Police Service (MPS) The Information Authority has taken action to improve civilian workforce was the right decision, and that awareness and behaviour towards information security, attempting to maintain the status quo would have been with themed monthly messages being communicated a strategic error. I am assured that considerable efforts across Parliament, and an additional member being are continuing to develop an effective and efficient in- added to the Authority to improve engagement with house security operation. the business. Staff have also been updated on how they need to handle and process information as they Information security and personal data incidents have prepared for the introduction of the General Since the Information Authority was established in Data Protection Regulation. Steps have been taken January 2017, it has provided a bicameral structure for to ensure that the House can meet its accountability information governance aligned with current public responsibilities, and training has also been provided sector best practice. I am assured by the activity of the to Members of Parliament so they can fulfil their legal Authority, and its oversight of Teams, that measures obligations as data controllers. are in place to maintain information security. This has been tested within the year, as the cyber-attack on Business resilience Parliament in June 2017 demonstrated both the reality Over the course of the year, business resilience across of the threat and the progress that was achieved over the House has been maintained and developed by the the preceding year in terms of Parliament’s capability Business Resilience Group, which has oversight across to identify, respond to and recover from a sustained Parliament. In the last year the group has in particular and determined attack. Following this, an independent sought assurance on the Relocation Contingencies review was commissioned and reported positively that Programme, several papers on electrical resilience and Parliament’s cyber security capability was significantly several reports on the work underway to strengthen improved compared with three years before. However, our salvage arrangements. During the year we have had the cyber risk remains high, and while work is ongoing occasion to use various of our plans and arrangements to embed the progress made to date, success is not in response to significant live incidents. The terrorist guaranteed. attack of March 2017 resulted in a significant review Following the cyber-attack, in which some personal data of our Incident Management Framework, resulting were compromised, I, as Data Controller, of the House in 68 recommendations, 65 of which have now of Commons, together with the Clerk of the Parliaments been completed. It has been necessary to engage (Data Controller of the House of Lords) voluntarily notified our Incident Management arrangements on other the Information Commissioner’s Office (ICO). 26 network occasions, such as when there was an escalation of accounts were compromised, which is less than 0.5% the national security level, during a power outage in of the 9,000 accounts on the Parliamentary Network. the Palace of Westminster, and following an incident In total, 39 mailbox accounts were compromised. This of falling masonry. Events such as these have also number is greater than the total of 26 users because two required Teams to refer to their Business Continuity users had more than one mailbox; and because 11 generic Plans, and feedback received indicates that Teams have organisational mailboxes were affected. Analysis was used these occasions to review and revise their plans undertaken as to the volume and nature of data in the in a manner which indicates a good understanding of relevant mailboxes, and an assessment made in line with their purpose and the need to keep them up to date. ICO guidance. In the case of one compromised generic Parliament has again achieved accreditation against organisational mailbox, a Select Committee mailbox, 77 the ISO 22301:2012 business continuity standard, and people were notified that personal data (information on the accompanying report confirmed there is evidence personal circumstances provided to support the work of of continual improvement within business continuity the Committee) was contained in the mailbox and was systems. During the year, the Relocation Contingencies potentially at risk of compromise19. In response to the Programme ended and is now a business as usual notification, the ICO concluded that no further action was activity. However, it remains a high priority area of work necessary, in large part because of the work already being in terms of mitigating the risk that access to the Palace done through the cyber security programme. is prohibited.

19 See www.parliament.uk/mps-lords-and-offices/offices/commons/media-relations-group/news/update-following-cyber-attack/ for more information. © UK Parliament/ Mark duffy Annual Report and Accounts 2017–18

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Estates programmes and projects a requirement for Category A projects to have an SRO In February, the two Houses endorsed the conclusion of and a Project Board, which were absent from this project the Joint Committee on the Palace of Westminster, that at its initiation. The action taken by management since a full and timely decant of the Palace is the best and this project began was reflected in the report, which the most cost-effective delivery option for its restoration commented that a current assessment of the project and renewal. Since then, work has proceeded on setting would provide an improved assurance rating. It is vital that up a Sponsor Board and Delivery Authority, initially the lessons from this experience are applied to our other in shadow form, before the necessary legislation is projects. In terms of the restoration work undertaken in enacted. The Restoration and Renewal Programme this project, I have been impressed by team of experts has a considerable interface with the planning and involved in this refurbishment. The project board have also design of the Northern Estates Programme, so the been able to tell the story of the conservation of this this decision has enabled progress to also be made this much-loved landmark to the public, and we must learn major Estate project. However, it will be some years these lessons too, particularly when considering the future before these programmes complete, and therefore in work on the Palace of Westminster. addition to a number of ongoing projects, we have The delivery of capital projects is an area of oversight initiated a Mechanical, Electrical, Public Health & where the two Houses work together, via the Joint Conservation (MEPC) Programme to maintain the Palace Investment Board chaired by the Director General, to of Westminster before it is possible to decant. decide on the priorities for funding and to gain assurance Throughout the year we have continued to evaluate on, and address concerns regarding, projects and our property portfolio, to ensure that we are able to programmes. I am assured that the Joint Investment Board meet the needs of Members and staff, both in the is providing scrutiny and challenge to the prioritisation of short and medium term. This year we agreed a lease the Strategic Estates Portfolio, to ensure that there is an to occupy Richmond House, which will provide decant understanding of the capacity and capability to deliver the accommodation for Members during the Northern portfolio and Parliament’s capacity to absorb the changes. Estate Programme and beyond. It has been put to use already, with staff being housed there while Environmental standards refurbishment work is ongoing in other buildings. I am conscious of my statutory responsibilities for compliance with environmental regulations. Progress I have seen some improvement in the governance of against our environmental compliance action plan has the estates projects and programmes that have started been made in the year, and we are compliant with all more recently. The audit report on the Elizabeth Tower statutory requirements for environmental performance. Refurbishment Project, re-emphasised previous concerns During the year, we have made preparations drastically in this area, and in particular in relation to the extent to to reduce Parliament’s consumption of single-use plastics which lessons are learned and are applied to all capital by 2019. These were announced on 15 May 2018, and projects. The report gave an unsatisfactory assurance the measures will virtually eliminate single-use avoidable level in relation to the business case development plastics, replacing them with compostable alternatives or process and the adequacy of systems to maintain project reusable options. control. The majority of the issues related to the earlier stages of the project, including the development of the Health and safety Outline Business Case, and I am assured that action I am assured that in relation to both food safety and was taken to address these through the more rigorous to lower risk and office-based activities we have procedures applied to develop the Full Business Case, satisfactory safety management practices. However, which effectively re-baselined the project. However, it there is some scope to make improvements to ensure is regrettable that through this process, the anticipated that these risks are consistently managed. cost and time for the project increased significantly. One of the actions taken since then, and outlined in With regard to higher risks activities, chiefly those the Strategic Estates Improvement Plan, has been to related to construction and maintenance, the better quantify the expected level of Optimism Bias Parliamentary Safety Assurance Board have informed and Quantified Risk at key junctures in the lifecycle of me that safety management has been found to be Category A projects, contributing to an improved level of variable. This assessment corresponds with an Internal project delivery assurance. Additionally, the Governance Audit report, which provided limited assurance that Framework for Projects and Programmes, approved by safety was effectively managed within the Parliamentary the Joint Investment Board in November 2016, includes Maintenance Services Team. The audit was commissioned Accountability Report Annual Report and Accounts 2017–18

65 by the Managing Director of In-House Services, following providing oversight of areas of joint working. This year his concerns with the health and safety management this has included consideration of the work of the system and in order to obtain specific information on Parliamentary Procurement and Commercial Service, the location and extent of the weaknesses. While I am the Enterprise Portfolio Management Office and lessons concerned by the report, I am assured that immediate learned from the cyber-attack. action was taken in response to the report, with the formulation of a health and safety transformation plan, Conclusion and that progress against the plan is being monitored by I am grateful to all House Service and Digital Service the In-House Services Management Board. With regard staff for the admirable professionalism that they have to construction, the volume of activities taking place in displayed throughout the past 12 months. Thanks close proximity to other users of the Parliamentary Estate to their efforts, often in challenging circumstances, has increased, which increases the risk of accidents. It is business as usual activity has continued, a phrase which essential that risk owners work to mitigate these risks, does scant justice to the excellent services of many and that our arrangements keep pace with the scope different sorts provided at all hours and every day of and complexity of the current works. Given the extent of the year. The House Service met the challenge of a snap work on the Estate, either underway or being planned, General Election, with little preparation or planning the inherent risk in this area is increasing. To meet this time for a complex project. The rapid and very effective challenge, and maintain an Estate that is safe for all delivery of this project was achieved through the who work within it, it is essential that we improve and cooperation and enthusiasm of staff, and demonstrated update our ways of working, training, risk management, what can be achieved by colleagues across the House reporting and monitoring in this area. This has begun, working together. All staff involved in delivering the through the recognition of the good practices observed post-election service, in whatever capacity, should be among those construction contractors working on the rightly proud of their achievements. The House Service estate. Steps have been taken to learn by example and to has continued to provide excellent services to Members, improve the health and safety culture within the House and I am sure that this will continue in the coming year. Service. In addition, the Parliamentary Safety Assurance In recent years there has been an overall trend of Board have set a target that the assurance rating for improvement and further bedding down of governance construction safety be ‘Substantial’ by 2020, achieved arrangements. The enhanced governance arrangements through improvements to governance and reporting in place have provided me with a robust assurance systems and through strengthening the first and second regime through which I have been able to assess properly lines of defence within the risk management framework. the effectiveness of governance, risk management and The Fire Safety Manager’s opinion is that the level internal controls and I am satisfied that the mechanisms of assurance for fire safety in 2017−18 remains at in place to manage risks are adequate. ‘Moderate’. During the year, the Crown Premises Fire Inspection Group has held a number of meetings to consider the progress of the Fire Safety Improvements Works Programme, which is intended to achieve life safety mitigations by the end of 2018. To date these meetings have shown that the action plan date of December 2018 will be met, but that any delay in the expected progress would put this date at risk.

Joint working There is an important bicameral element to the work of the Commons Executive Board. For this reason, a robust relationship between the administrations of the two Houses is needed to enable both of them to deliver our objectives effectively. The existence of a Sir David Natzler KCB, Board-level risk, which was discussed several times Accounting Officer during the year, reflects the importance that is placed House of Commons on the relationship. Bicameral issues are also considered at joint meetings of both Houses’ Audit Committees, 13 July 2018 Annual Report and Accounts 2017–18 Accountability Report

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Remuneration and Staff 1.49%) in September 2017. An additional non- consolidated award, that are one-off payments and Report not consolidated as part of an individual’s future salary entitlement, varied from 1% to 1.5%. This section of the report sets out the financial information and commentary about the Commons Remuneration (salary, benefits in kind and Executive Board and staff pay for the year ended 31 pensions) March 2018. Commission external members a. Remuneration policy The House of Commons Commission has delegated to The Commission is supported by two external the Clerk of the House responsibility for ensuring that memebers who receive remuneration for their services staff complement, grading, pay and conditions of service as follows: of staff in Teams are broadly in line with those of the Home Civil Service. The House operates three separate Salary pay structures for three sections of the organisation; External Members Senior Commons Structure (SCS, in line with Senior Civil (£000) Service grades); Catering Staff; and the remaining staff 2017–18 2016–17 of the House (A-E grades). The House of Commons is an J Gaymer DBE 25–30 25–30 accredited London Living Wage employer. J McCall 15–20 15–20 Those in the Senior Commons Structure (SCS) received Figures in table have been subject to audit consolidated increases ranging from zero to 2%. Awards of 2% were paid to outstanding performers The external members do not receive any bonus whose salary was below comparators in the Civil payments, benefits-in-kind or pension benefits. Service. The pay band minima for some SCS pay bands was increased, resulting in a small number of staff receiving increases of greater than 2%. The average consolidated increase for those in SCS was 1.49%. In addition SCS staff can also benefit from a system of additional performance awards, that are one-off payments and not consolidated as part of an individual’s future salary entitlement, if the Remuneration Committee considers that they meet the criteria. Those that met the criteria were paid a one-off payment of £7,000, pro-rata for those that had been in post for less than a year. Staff in A-E pay bands paid below the target rate for their pay band and whose performance was recorded as ‘fully effective’ or ‘outstanding’ in their annual IPR assessment received an award which equated to a one-step progression. Staff already at the target rate, band maximum, or in the higher contribution zone received consolidated awards that amounted to a 1% increase. An additional non-consolidated award, that are one off payments and not consolidated as part of an individual’s future salary entitlement varied from 0.5% to 1.00% to staff at the target rate, band maximum, or in the higher contribution zone . The average consolidated increase for staff in pay band A-E was 1.97%. Staff in catering bands received a consolidated basic pay award between 1% and 1.76% (average increase Accountability Report Annual Report and Accounts 2017–18

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

Bonus Payments Benefits in kind (b) Pension benefits20 Total Officials Salary (a) (£000) (nearest £100) (£000) (£000)

2017–18 2016–17 2017–18 2016–17 2017–18 2016–17 2017–18 2016–17 2017–18 2016–17

D Natzler 180–185 175–180 - - 16.2 15.6 (5) 37 190–195 230–235

I Ailles (c) 160–165 160–165 - 0–5 - - - - 160–165 165–170

M Barrett (d) 120–125 120–125 - - - - 18.2 23 140–145 140–145

C. Bamford 55-60 (d) (from 12 105–110 (100- 0–5 - - - 18.8 10 125–130 65–70 September 2016) 105FYE)

J Benger 125–130 125–130 - - - - 6 83 130–135 205–210

J Borley CB (e) 165–170 (until 31 October - (125– - - - - - 29 - 195–200 2016) 130FYE)

L Bridges (from 25 April 50–55 65–70 - - - - 20 27 70–75 95–100 2016 until 30 (75-80FYE) (70–75FYE) November 2017)

M Cwynarski (from 10 Oct 2016 50–55 35–40 - - - - 25 21 75–80 60–65 until 30 November (80–85FYE) (80–85FYE) 2017)

B Finnimore 85–90 (from 10 June 90–95 (105– - - - - 36 34 125–130 120–125 2016 until 31 110FYE) March 2018)

T Goldsmith (from 25 April 30–35 ------14 - 45–50 16 to 9 October (70–75FYE) 2016)

R Greig (f) 50–55 (until 8 September 115–120 - 5–10 - - 21 47 70–75 170–175 (120–125FYE) 2017)

E Hepburn 60–65 (from 1 September 105–110 (100– 0–5 - - - (33) 13 75–80 70–75 2016) 105FYE)

M Hutton (from 25 April 15–20 ------4 - 15–20 2016 to 24 June (95–100FYE) 2016)

T Jessup (f) 50–55 (from 9 September - - - - - 49 - 100–105 - (95–100FYE) 2017)

20 The value of pension benefits accrued during the year is calculated as the real increase in pension multiplied by 20, plus the real increase in any lump sum, less the contributions made by the individual. The real increases exclude adjustments due to inflation or the transfer of pension rights. Annual Report and Accounts 2017–18 Accountability Report

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Salary (a) Bonus Payments Benefits in kind (b) Pension benefits21 Total Officials (£’000) (£000) (nearest £100) (£000) (£000)

2017–18 2016–17 2017–18 2016–17 2017–18 2016–17 2017–18 2016–17 2017–18 2016–17

P Martin 35–40 (from 25 April (100– 2016 to 9 ------10 - 45–50 105 September FYE) 2016)

P Richards (from 25 April 45–50 65–70 2016 until 30 (70–75 (65–70 - - - - 19 25 65–70 90–95 November FYE) FYE) 2017)

A Toft (from 25 June 40–45 45–50 2016 until 30 (65–70 (60–65 - - - - 39 18 80–85 65–70 November FYE) FYE) 2017)

A Walker (e) 165–170 (until 31 - (125– - - - - - 18 - 185–190 October 2016) 130 FYE)

E Watchorn (from 1 October 45–50 30–35 2016 until 30 (70–75 (65–70 - - - - 26 23 70–75 55–60 November FYE) FYE) 2017)

P Young 120–125 120–125 - - - - 48 47 170–175 165–170

Figures in the table have been subject to audit

(a) Salary includes gross salary and allowances. (e) Compensation for loss of office: J Borley and A Walker received compensation payments of (b) Benefits in kind: The monetary value covers any £90,000–£95,000 when they left the House of benefits provided by the House and treated by HM Commons on 30 September 2016 following an Revenue and Customs as a taxable emolument. These organisational restructure. These payments were figures represent the benefit from the official residences agreed in the 2015–16 reporting year. that officers are required to use in the course of their duties. (f) The salary and pension benefits for the Director of Parliamentary Digital Service are paid directly by the (c) I Ailles has opted out of the Civil Service pension House of Commons; 30% of the costs are recharged arrangements. to the House of Lords. The salary and pension benefits (d) Two board members, M Barrett and C disclosed represent the total remuneration package paid Bamford, have opted to have partnership pensions between the two Houses. During the year R Greig left rather that joining the Civil Service Pension the House of Commons and was replaced by T Jessup. Scheme. The figures shown under pension benefits are the employer’s contributions.

21 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 2017–18

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Pension benefits (audited) The pension entitlements for the members of the 2016–17 figures, see House of Commons Annual Commons Executive Board, covering the period during Accounts, HC 226): which they were on the Board, were as follows (for

Accrued pension Real increase in CETV at CETV at Real increase and related lump pension and related 31/3/18 31/3/1722 In CETV sum at 31/3/18 lump sum at 31/3/18 (£000) (£000) (£000) (£000) (£000)

D Natzler 95–100 0–2.5 2,002 1,976 (6)23 plus lump sum of 285–290 plus lump sum of 0–2.5

J Benger 45–50 0–2.5 1,127 1,050 6 plus lump sum of 145–150 plus lump sum of 0–2.5

L Bridges (from 25 April 2016 until 30 10–15 0–2.5 127 110 9 November 2017)

M Cwynarski 15–20 0–2.5 (from 10 Oct 2016 until 30 284 256 13 plus lump sum of 35–40 plus lump sum of 0–2.5 November 2017)

B Finnimore (from 10 June 2016 until 31 20–25 0–2.5 337 292 27 March 2018)

R Greig (until 8 September 2017) 5–10 0–2.5 61 49 7

E Hepburn 40–45 0 plus lump sum 834 801 (32)23 (from 1 September 2016) plus lump sum of 15–20 of 0–2.5

T Jessup 20–25 0–2.5 282 252 22 (from 9 September 2017) plus lump sum of 50–55 plus lump sum of 2.5–5

P Richards (from 25 April 2016 until 30 5–10 0–2.5 112 99 9 November 2017)

A Toft (from 25 June 2016 until 30 15–20 0–2.5 245 214 25 November 2017)

E Watchorn (from 1 October 2016 until 30 10–15 0–2.5 154 138 11 November 2017)

P Young 5–10 2.5–5 105 66 28

Figures in table have been subject to audit

22 The figures may be different from the closing figures in the 2016–17 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. 23 Taking account of inflation, the CETV funded by the employer has decreased in real terms Annual Report and Accounts 2017–18 Accountability Report

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Civil Service Pensions per classic and benefits for service from October 2002 Pension benefits are provided through the Civil Service worked out as in premium. In nuvos a member builds pension arrangements. From 1 April 2015 a new up a pension based on their pensionable earnings pension scheme for civil servants was introduced – the during their period of scheme membership. At the Civil Servants and Others Pension Scheme or alpha, end of the scheme year (31 March) the member’s which provides benefits on a career average basis earned pension account is credited with 2.3% of with a normal pension age equal to the member’s their pensionable earnings in that scheme year and State Pension Age (or 65 if higher). From that date the accrued pension is uprated in line with Pensions all newly appointed civil servants and the majority of Increase legislation. Benefits in alpha build up in a those already in service joined alpha. Prior to that date, similar way to nuvos, except that the accrual rate civil servants participated in the Principal Civil Service is 2.32%. In all cases members may opt to give up Pension Scheme (PCSPS). The PCSPS has four sections: (commute) pension for a lump sum up to the limits set three providing benefits on a final salary basis (classic, by the Finance Act 2004. premium or classic plus) with a normal pension age of The partnership pension account is a stakeholder 60; and one providing benefits on a whole career basis pension arrangement. The employer makes a basic (nuvos) with a normal pension age of 65. contribution of between 8% and 14.75% (depending These statutory arrangements are unfunded with the on the age of the member) into a stakeholder cost of benefits met by monies voted by Parliament pension product chosen by the employee from a each year. Pensions payable under classic, premium, panel of providers. The employee does not have to classic plus, nuvos and alpha are increased annually contribute, but where they do make contributions, in line with Pensions Increase legislation. Existing the employer will match these up to a limit of 3% of members of the PCSPS who were within 10 years of pensionable salary (in addition to the employer’s basic their normal pension age on 1 April 2012 remained contribution). Employers also contribute a further 0.5% in the PCSPS after 1 April 2015. Those who were of pensionable salary to cover the cost of centrally- between 10 years and 13 years and 5 months from provided risk benefit cover (death in service and ill their normal pension age on 1 April 2012 will switch health retirement.) into alpha sometime between 1 June 2015 and 1 The accrued pension quoted is the pension the member February 2022. All members who switch to alpha have is entitled to receive when they reach pension age, their PCSPS benefits ‘banked’, with those with earlier or immediately on ceasing to be an active member of benefits in one of the final salary sections of the PCSPS the scheme if they are already at or over pension age. having those benefits based on their final salary when Pension age is 60 for members of classic, premium and they leave alpha. (The pension figures quoted for classic plus, 65 for members of nuvos, and the higher officials show pension earned in PCSPS or alpha – as of 65 or State Pension Age for members of alpha. appropriate. Where the member has benefits in both (The pension figures quoted for officials show pension the PCSPS and alpha the figure quoted is the combined earned in PCSPS or alpha – as appropriate. Where the value of their benefits in the two schemes.) Members official has benefits in both the PCSPS and alpha the joining from October 2002 may opt for either the figure quoted is the combined value of their benefits appropriate defined benefit arrangement or a ‘money in the two schemes, but note that part of that pension purchase’ stakeholder pension with an employer may be payable from different ages.) contribution (partnership pension account). Further details about the Civil Service pension Employee contributions are salary-related and range arrangements can be found at the website between 4.6% and 8.05% for members of classic, www.civilservicepensionscheme.org.uk premium, classic plus, nuvos and alpha. Benefits in classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump Cash Equivalent Transfer Values sum equivalent to three years initial pension is payable A Cash Equivalent Transfer Value (CETV) is the on retirement. For premium, benefits accrue at the rate actuarially assessed capitalised value of the pension of 1/60th of final pensionable earnings for each year scheme benefits accrued by a member at a particular of service. Unlike classic, there is no automatic lump point in time. The benefits valued are the member’s sum. Classic plus is essentially a hybrid with benefits accrued benefits and any contingent spouse’s pension for service before 1 October 2002 calculated broadly as payable from the scheme. A CETV is a payment made Accountability Report Annual Report and Accounts 2017–18

71 by a pension scheme or arrangement to secure pension Fair Pay Disclosure benefits in another pension scheme or arrangement Reporting bodies are required to disclose the when the member leaves a scheme and chooses to relationship between the remuneration of the highest- transfer the benefits accrued in their former scheme. paid director in their organisation and the median The pension figures shown relate to the benefits that remuneration of the organisation’s workforce. the individual has accrued as a consequence of their total membership of the pension scheme, not just their The following table shows the ratio of the median of all service in a senior capacity to which disclosure applies. House staff remuneration compared to the highest paid member of the Commons Executive Board: The figures include the value of any pension benefit in another scheme or arrangement which the member has transferred to the Civil Service pension arrangements. 2017–18 2016–17 They also include any additional pension benefit Highest earner’s total accrued to the member as a result of their buying 195–200 195–200 remuneration (£000) additional pension benefits at their own cost. CETVs are worked out in accordance with The Occupational Median of total remuneration (£) 30,772 31,050 Pension Schemes (Transfer Values) (Amendment) Ratio 6.42 6.36 Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting Figures in table have been subject to audit from Lifetime Allowance Tax which may be due when pension benefits are taken. Total remuneration includes annualised salary, non- consolidated performance-related pay and benefits-in- Real increase in CETV kind. It does not include severance payments, employer pension contributions and the cash equivalent transfer This reflects the increase in CETV that is funded value of pensions. by the employer. It does not include the increase in accrued pension due to inflation, contributions In 2017–18, no employee received remuneration in paid by the employee (including the value of any excess of the highest paid member of the Commons benefits transferred from another pension scheme Executive Board (2016–17: 0). Remuneration ranged or arrangement) and uses common market valuation from £3,000 to £200,000 (2016–17: £3,000 to factors for the start and end of the period. £200,000). Annual Report and Accounts 2017–18 Accountability Report

72 b. Staff Report

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

2017–18 2016–17

Charged Charged Charged Charged to revenue to capital Total to revenue to capital Total budgets budgets budgets budgets

£000 £000 £000 £000 £000 £000 Wages and salaries 81,395 539 81,934 76,674 548 77,222 Social security costs 8,514 68 8,582 7,863 60 7,923 Other pension costs 15,721 76 15,797 14,768 107 14,875 Contributions to stakeholder 273 11 284 216 - 216 pensions Sub Total 105,903 694 106,597 99,521 715 100,236 Inward secondments/agency staff 8,885 1,608 10,493 6,570 1,306 7,876 Sub Total 114,788 2,302 117,090 106,091 2,021 108,112 Less recoveries in respect of outward (928) - (928) (733) - (733) secondments Total net costs 113,860 2,302 116,162 105,358 2,021 107,379 Figures in table have been subject to audit

The increase in staff costs when compared to the prior cost of the benefits accruing during 2016–17 to be year can be explained by additional security staff and paid when the member retires, and not the benefits an increase in staff resources to deliver projects and paid during this period to existing pensioners. programmes. Employees can opt to open a partnership pension The Principal Civil Service Pension Scheme (PCSPS) and account, a stakeholder pension with an employer the Civil Servants and Others Pension Scheme (CSOPS), contribution. Employers’ contributions of £283,800 known as ‘alpha’, are unfunded multi-employer defined (2016–17: £216,360) were paid to one or more of a benefit schemes in which the House of Commons is panel of three appointed stakeholder pension providers. unable to identify its share of the underlying assets and Employer contributions are age-related and range from liabilities. The full actuarial valuation was carried out as 8% to 14.75% of pensionable pay. Employers also at 31 March 2014. Details can be found in the resource match employee contributions up to 3% of pensionable accounts of the Cabinet Office: Civil Superannuation pay. In addition, employer contributions of £10,000 (www.civilservicepensionscheme.org.uk/about-us/ (0.5%; 2016–17: £8,000, 0.5%) of pensionable pay, resource-accounts). were payable to PCSPS to cover the cost of the future provision of lump sum benefits on death in service and For 2017–18, employer contributions of £15,818,000 ill health retirement of these employees. Contributions (2016–17: £14,875,000) were payable to the civil due to the partnership pension providers at the service pension schemes at one of four rates in the reporting period date were £nil (2016–17: £4,600). range 20.0 to 24.5 per cent of pensionable pay, based on salary bands. The Scheme Actuary reviews employer contributions every four years following a full scheme valuation. The contribution rates are set to meet the © UK Parliament/Mark Duffy Annual Report and Accounts 2017–18

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Exit packages

Exit package cost Number of Number of other redundancies departures agreed

2017–18 2016–17 2017–18 2016–17

<£10,000 - - 39 2

£10,000 – £25,000 - - 8 18

£25,000 – £50,000 - - 5 11

£50,000 – £100,000 - - 2 12

Total number of exit packages by type - - 54 43

Total Resource cost ( £) - - 527,148 1,620,505

Figures in table have been subject to audit Departure costs during 2017–18 have been calculated Ill-health retirement costs are covered by the pension in accordance with the provisions of the Civil Service scheme and are not included in the table. Compensation Scheme (CSCS), a statutory scheme made under the Superannuation Act 1972. Exit costs Average number of persons employed are accounted for in full in the year that the departure is agreed. The House did not run a voluntary exit scheme in The average number of full-time equivalent (FTE) 2017–18 however as a consequence of a judicial review persons employed during the year including those staff on the CSCS, the voluntary exits the House agreed in involved in delivering shared services funded by the 2016–17 were reviewed and as a consequence the House of Lords, were: House incurred additional costs. These are shown above along with new exit packages agreed in the year. 2017–18 2016–17 Within the figures above are 32 cases (£254,000) that Average number 2,374 2,321 are broadly consistent with the CSCS although they (permanent staff) were not part of a formal House-wide exit scheme. Average number They are also included in note 4 (Parliamentary 57 46 Accountability Disclosures). (agency staff)

Staff composition The House holds information of the number of people who have declared a non-binary gender, the figures are too low to publish as it may be possible to identify individuals. The following table analyses the number of people in each of the two main genders.

At 31 March 2017 Male Female At 31 March 2018 Male Female

ExCo 2 1

Board 6 5 CEB 6 3

SCS 47 27 SCS 47 34

Employees 1,407 1,110 Employees 1,483 1,179 Accountability Report Annual Report and Accounts 2017–18

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Sickness absence data reporting year. These included financial training (for The recorded sickness absence figure for 2017–18 budget managers), diversity and inclusion training and stands at 6.6 average working days not worked per fire safety training. person. (2016–17: 6.1 average workings days). The 2016–17 figure compares with 5.9 days in the Civil Expenditure on consultancy Service (this is the latest figure available). During 2017–18 £1,024,000 was incurred on consultancy costs. (2016–17: £1,616,000) Staff policies applied during the financial year Candidates are asked at application stage if they require Tax arrangements of Public Appointees any adjustments at any stage of the recruitment process, On 23 May 2012 the Treasury published Review of the for example additional time to undertake written Tax Arrangements of Public Sector Appointees, and tests. The House Recruitment team are responsible on 24 August 2012 the Cabinet Office published the for ensuring that requests for adjustments from Procurement Policy Note Tax Arrangements of Public candidates are managed effectively. In some cases Appointees. this may require liaison with the Diversity and Inclusion team. In addition, the House runs a ‘Recruiting for Off-payroll engagements within Parliamentary Digital Excellence’ one day training course which is mandatory Services (formerly PICT) are reported in full in the for managers to attend prior to recruiting new staff - following table even though their costs are shared with this course includes a session on diversity. The House the House of Lords. also introduced a set of training requirements called ‘the essentials’, which all staff had to complete in the

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Table 1: For all off-payroll engagements as of 31 March 2018, for more than £245 per day and that lasted for longer than six months Number

Existing engagements as of 31 March 2018 44

Of which at the time of reporting have existed for:

less than one year 13

between one and two years 26

between two and three years 2

between three and four years -

for four years or more 3

Table 2: For all new off-payroll engagements, or those that reached six months in duration, between 1 April 2017 and 31 March 2018, 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 2017 and 31 38 March 2018

Of which:

Number assessed as caught by IR35 1

Number assessed as not caught by IR35 37

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

Number of engagements reassessed for consistency/assurance purposes during the year 0

Number of engagements that saw a change to IR35 status following the consistency review 0

Table 3: For any off-payroll engagements of Board Members, and/or, senior officials with significant financial responsibility, between 1 April 2017 and 31 March 2018 Number

Off-payroll engagements of board members, and/or senior officials with significant financial - responsibility, during the financial year.

Individuals that have been deemed ‘board members, and/or senior officials with significant responsibility’, during the financial year both off-payroll and on-payroll. 15

Of the 15 officials, 10 are members of the Commons Executive Board and 5 were senior officials (not Board Members) with budgetary responsibility in excess of £10 million.

Sir David Natzler KCB, Accounting Officer, House of Commons

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

Summary of Resource and Capital Outturn 2017–18

2016–17 Estimate Outturn 2017–18 Outturn

Voted outturn compared Non- Non- Note Voted Total Voted Total with Total Voted Voted Estimate: saving/ (excess)24

Departmental Expenditure £000 £000 £000 £000 £000 £000 £000 £000 Limit equivalent25 SoPs Resource 255,833 100 255,933 228,693 - 228,693 27,140 211,028 1.1 SoPs Capital 202,700 - 202,700 194,175 - 194,175 8,525 46,891 1.2 Total 458,533 100 458,633 422,868 - 422,868 35,665 257,919

Net cash requirement 2017–18

Outturn compared 2017–18 2017–18 with 2016–17 Note Estimate Outturn Estimate: Outturn saving/ (excess)

£000 £000 £000 £000

SoPS 3 328,300 275,629 52,671 231,903

24 Explanations of variances between the Estimate and Outturn are provided in the Statement of Parliamentary Supply Commentary). 25 DEL equivalent represents Departmental Equivalent Limit equivalent as defined in the Main Estimate (HC1119) and Supplementary Estimate (HC788). Annual Report and Accounts 2017–18

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Administration Costs 2017–18

2017–18 2017–18 2016–17 Estimate Outturn Outturn £000 £000 £000 SoPS 3 255,933 228,693 211,028

Notes to the Statement of Parliamentary Supply (SoPS)

SoPS 1. Net outturn

SoPS 1.1. Analysis of net resource outturn

Estimate Outturn 2017–18 2016–17 Gross Income Net Gross Income Net Variance Outturn net Outturn to Estimate £000 £000 £000 £000 £000 £000 £000 £000 Spending in DEL 273,933 (18,100) 255,833 248,271 (19,578) 228,693 27,140 211,028 equivalent

Non-voted 100 - 100 - - - 100 -

SoPS 1.2. Analysis of net capital outturn

Estimate Estimate Outturn 2017–18 2016–17 Gross Income Net Gross Income Net Variance Outturn net Outturn to Estimate £000 £000 £000 £000 £000 £000 £000 £000 Spending in DEL 202,700 - 202,700 194,175 - 194,175 8,525 46,891 equivalent

Non-voted ------© UK Parliament/Mark Duffy Annual Report and Accounts 2017–18 Accountability Report

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SoPS 2. Reconciliation of net resource outturn to net operating cost

Outturn Outturn Note 2017–18 2016–17

£000 £000

Total resource outturn in Statement of Parliamentary Supply SoPS 1.1

Voted 228,693 211,028

Non-Voted - -

Donations classified as capital income - (15)

Net Expenditure in Statement of Comprehensive Net Expenditure 228,693 211,013

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

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

£000 £000 £000

Resource Outturn SoPS 1.1 255,933 228,693 27,240

Capital Outturn SoPS 1.2 202,700 194,175 8,525

Accruals to cash adjustments:

Adjustments to remove non-cash items:

Non-cash items – other administration costs 3 (27,200) (31,382) 4,182

Non-cash items – other capital costs 2,084 (2,084)

Adjustments to reflect movements in working balances:

Increase/(decrease) in inventories 10 106 (106)

Increase/(decrease) in receivables 12 3,575 (3,575)

(Increase)/decrease in payables 13 (10,027) 10,027

(Increase)/decrease in payables falling due after more than one year 13 (103,033) (111,728) 8,695

Use of provision 14 133 (133)

Removal of non-voted budget items SoPS 1.1 (100) - (100) & 1.2

Net Cash Requirement 328,300 275,629 52,671 © UK Parliament/Jessica Taylor Annual Report and Accounts 2017–18

81 Annual Report and Accounts 2017–18 Accountability Report

82 b. Statement of Parliamentary Supply Commentary The snap election in June 2017 also had an impact on some budgets but to a much lesser extent; a substantial Scope of the Estimate part of the Chamber and Committee Team’s £2 million These accounts cover expenditure arising from general underspend was due to the election. In addition, administration of the House of Commons and activities income was less than expected for catering, tours and undertaken to meet Parliament’s objectives, associated retail. commercial activities; grants to organisations who Forecasting building valuations continues to be promote the House of Commons’ objectives, and other challenging; a drop in investment property values due non-cash costs. Income arising from rental, fees and to challenges faced by the retail market resulted in a charges in connection with activities within Parliament. £3.0 million charge to resource. However this was off- The cost of Members’ salaries, allowances and other set by a lower depreciation charge as a result of delays related expenditure is borne in the main by the in the capital programme. Independent Parliamentary Standards Authority (IPSA) Estimate; a small amount of expenditure is met by the Capital House of Commons Members Estimate. The House agreed an initial capital budget of £154.1 million which was increased by £48.6 million via Resources the supplementary estimate. At the time of the The 2017–18 budget was the second year of the 2016– supplementary estimate the accounting treatment of 21 strategy, with a key focus on delivering the House Richmond House was under review and budgetary Services three objectives, whilst seeking to improve our cover was required to cover a variety of options. services to customers, enhance the House’s reputation, Richmond House was occupied by the Department of ensure that we deliver value for money and use our Health but the building is owned by the Department resources effectively, and that we have a positive impact for Communities and Local Government. There is an in the work of Members. agreement that the House of Commons will occupy the property at a peppercorn rent until the summer The House of Commons Commission agreed a resource of 2019. It is the intention of all parties concerned budget of £258.0 million (£257.9 million voted and that Richmond House will be transferred to the House £0.1 million non-voted) (HC 1119) in April 2017. of Commons during 2019 at book value but for no This was reduced by £2.1 million via supplementary consideration. This transaction has been included in estimate (HC 788) in February 2018 to reflect the these accounts as a finance lease. transfer of budgets from the Members Estimate to the Administration Estimate. There were a number Capital expenditure totalled £194.2 million against of reasons for this transfer but the key driver was to the total budget of £202.7 million, of this £117 improve financial monitoring of these budgets. The million relates to Richmond House, £18.3 million for 1 budgets transferred included Members IT equipment, Canon Row, £12.2 million for fire safety works, £6.5 whose net asset value (£2.1 million) was transferred to million for work on the cast iron roofs as well as the the Administration Accounts. main strategic programmes detailed in the following sections. The £8.5 million underspend is due to delays The resource budget shows an underspend of in a number of projects, notably Canon Row (£7.2 £27.1 million against the budget of £255.8 million. million) off-set by £2.1 million transfer of assets from Most of this underspend relates to property rent and the Members Estimate. rates (£14.1 million) and in particular an assumption that the House would be permitted to use part of 100 Parliament Street which did not happen. In addition resource building projects associated with 100 Parliament Street, Restoration and Renewal and 7 were delayed or cancelled which accounts for another £12.1 million. Accountability Report Annual Report and Accounts 2017–18

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Strategic Programmes Costs incurred on the Northern Estate Programme in 2017–18 are £13.9 million (£13.2 million capital, Restoration and Renewal £0.7 million resource). Of this, £5.7 million relates to The Joint Committee on the Palace of Westminster and the development of Richmond House for its future use the Public Accounts Committee both recommended but does not include the cost of temporary decant of full decant whilst the Palace of Westminster is restored staff from 7 Millbank. Prior years costs are: and for the work to be delivered through an arm’s- length delivery authority. This was put to both Houses in January and February 2018 and both Houses concurred with this approach. Spend this year on the Restoration and Renewal 2015–16 2016–17 2017–18 programme was less than the estimate due to the delay £million £million £million in reaching this decision and progress continues to be Resource 0.1 3.0 0.7 slow as legislation is now required to establishe the Capital 1.2 6.8 13.2 delivery body. However, plans continue to progress the programme in terms of setting up the structure of a shadow delivery authority and in delivering the outline business case to support the programme. Elizabeth Tower The House of Commons’ contribution to the Programme in 2017–18 was £3.9 million in capital expenditure and Work started early in 2017 to erect the scaffolding £1.8 million is resource expenditure. The contribution around the Elizabeth Tower to facilitate the from the House of Commons in prior years is: refurbishment of this iconic landmark. It has taken nearly a year to erect the 800 tonnes of scaffolding around the 96 metre tower. The House of Commons has contributed £8.3 million capital to date with £7.2 million spent in 2017–18. Pre 2015–16 2015–16 2016–17 2017–18 £million £million £million £million Cash Resource 0.4 0.8 1.3 1.8 Changes to planning assumptions on the Restoration Capital 3.2 3.8 2.7 3.9 and Renewal and Northern Estate Programmes have resulted in a lower capital requirement. For Restoration and Renewal the delay in obtaining a Decision in Principle contributed to a £9.8m million underspend for the accommodation complexities mentioned earlier Northern Estates Programme in the report contributed towards the £46.3 million The Northern Estate Programme involves the underspend Northern Estates. The combined impact is a refurbishment of four currently occupied listed cash reduction to Capital of £56.1 million. buildings, Norman Shaw North, 1 Derby Gate, Norman Shaw South and 1 Parliament Street, preceded by the The House agreed an initial cash requirement of acquisition and refurbishment of Richmond House. £384.4 million for 2017–18 but this was reduced by £56.1 million to £328.3 million via the supplementary The original plans for this building were to use it for estimate. This reduction was due to changes in the Members’ and Members’ staff accommodation for the planning assumptions for the Restoration and Renewal, duration of works to the Northern Estate. Whilst the and Northern Estate Programmes. medium term plans for Richmond House remain the same, in the short-term, the building is being used to The cash underspend of £52.7 million is driven mainly accommodate House staff from 7 Millbank to enable by the underspends on the resource and capital budgets disruptive works to be undertaken on that property. (total £38.9 million) along with £14.5 million in working capital movements (details can be found in SoPS 3: Reconciliation of net resource outturn to net cash requirement). Annual Report and Accounts 2017–18 Accountability Report

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4. Parliamentary Accountability Disclosures a. Losses and special payments This section is subject to audit

Losses Statement

2017–18 2016–17

Total number of cases 13 41

Total value of cases (£000) 60 (34)

Details of cases over £300,000 There were no cases over £300,000 in 2017–18 (2016–17: nil)

Special Payments

2017–18 2016–17

Total number of cases 64 34

Total value of cases (£000) 533 608

There are no special payments which exceed £300,000. (2016–17: nil.) b. Fees and Charges c. Remote Contingent Liabilities This section is subject to audit This section is subject to audit The main areas for generating income are catering In accordance with IAS 37, the House discloses for (including banqueting), and tours (including retail). Fees parliamentary reporting and accountability purposes and charges for all areas are set in accordance with the certain statutory and non-statutory contingent liabilities House of Commons policy which is published at where the likelihood of a transfer of economic benefit is remote, in accordance with the HM Treasury publication www.parliament.uk/site-information/foi/ Managing Public Money. transparency-publications/hoc-transparency- publications/financial-information/financial-policies As at 31 March 2018 there is a remote contingent liability relating to Works of Art on loan from various Income received during 2017–18 was £9.7 million for collections. Whilst there is no expectation this will be catering (£10.1 million in 2016–17) and £4.3 million triggered, the liability is estimated at £2.4 million (£4.6 million for 2016–17) for tours and retail. Catering (2016–17: nil). were affected by the snap election and tours and retail were affected by terror related closures. Tours and retail are expected to recover the cost of providing the service, whereas the cost of the catering services was £3.0 million.

Sir David Natzler KCB, Accounting Officer, House of Commons

13 July 2018 Accountability Report Annual Report and Accounts 2017–18

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5. Certificate and Report of the Comptroller and Auditor General to the House of Commons

Opinion on financial statements Basis of opinions I certify that I have audited the financial statements I conducted my audit in accordance with International of the House of Commons Administration for the Standards on Auditing (ISAs) (UK) and Practice Note 10 year ended 31 March 2018. The financial statements ‘Audit of Financial Statements of Public Sector Entities comprise: Statements of Comprehensive Net in the ’. My responsibilities under Expenditure, Financial Position, Cash Flows, Changes those standards are further described in the Auditor’s in Taxpayers’ Equity and the related notes, including responsibilities for the audit of the financial statements the significant accounting policies. These financial section of my certificate. Those standards require me and statements have been prepared under the accounting my staff to comply with the Financial Reporting Council’s policies set out within them. Revised Ethical Standard 2016. I am independent of the House of Commons Administration in accordance I have also audited the Statement of Parliamentary with the ethical requirements that are relevant to my Supply and the related notes, and the information audit and the financial statements in the UK. My staff in the Accountability Report that is described in that and I have fulfilled our other ethical responsibilities report as having been audited. in accordance with these requirements. I believe that In my opinion: the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. • the financial statements give a true and fair view of the state of the House of Commons Responsibilities of the Accounting Officer for the Administration’s affairs as at 31 March 2018 financial statements and of its net expenditure for the year then ended; and As explained more fully in the Statement of Accounting Officer’s Responsibilities, the Accounting Officer • the financial statements have been properly is responsible for the preparation of the financial prepared in accordance with the Financial statements and for being satisfied that they give a true Reporting Manual as adapted or interpreted for and fair view. the House of Commons context.

Auditor’s responsibilities for the audit of the finan- Opinion on regularity cial statements In my opinion, in all material respects: My responsibility is to audit, certify and report on the financial statements in accordance with ISAs (UK). • the Statement of Parliamentary Supply properly presents the outturn against voted Parliamentary An audit involves obtaining evidence about the control totals for the year ended 31 March 2018 amounts and disclosures in the financial statements and shows that those totals have not been sufficient to give reasonable assurance that the financial exceeded; and statements are free from material misstatement, whether caused by fraud or error. Reasonable assurance • the income and expenditure recorded in the is a high level of assurance, but is not a guarantee that financial statements have been applied to the an audit conducted in accordance with ISAs (UK) will purposes intended by Parliament and the financial always detect a material misstatement when it exists. transactions recorded in the financial statements Misstatements can arise from fraud or error and are conform to the authorities which govern them. considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. Annual Report and Accounts 2017–18 Accountability Report

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As part of an audit in accordance with ISAs (UK), I • evaluate the overall presentation, structure and exercise professional judgment and maintain professional content of the financial statements, including scepticism throughout the audit. I also: the disclosures, and whether the consolidated financial statements represent the underlying • identify and assess the risks of material transactions and events in a manner that achieves misstatement of the financial statements, whether fair presentation. due to fraud or error, design and perform audit procedures responsive to those risks, and obtain I communicate with those charged with governance audit evidence that is sufficient and appropriate regarding, among other matters, the planned scope to provide a basis for my opinion. The risk of not and timing of the audit and significant audit findings, detecting a material misstatement resulting from including any significant deficiencies in internal control fraud is higher than for one resulting from error, that I identify during my audit. as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of I am required to obtain evidence sufficient to internal control. give reasonable assurance that the Statement of Parliamentary Supply properly presents the outturn • obtain an understanding of internal control relevant against voted Parliamentary control totals and that to the audit in order to design audit procedures those totals have not been exceeded. The voted that are appropriate in the circumstances, but Parliamentary control totals are Departmental not for the purpose of expressing an opinion Expenditure Limit equivalent (Resource and Capital), on the effectiveness of the House of Commons Non-Budget (Resource) and Net Cash Requirement. I Administration’s internal control. am also required to obtain evidence sufficient to give • evaluate the appropriateness of accounting reasonable assurance that the expenditure and income policies used and the reasonableness of recorded in the financial statements have been applied accounting estimates and related disclosures to the purposes intended by Parliament and the financial made by management. transactions recorded in the financial statements conform to the authorities which govern them. • conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the House of Commons Administration’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the entity to cease to continue as a going concern. Accountability Report Annual Report and Accounts 2017–18

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Other Information Matters on which I report by exception The Accounting Officer is responsible for the other I have nothing to report in respect of the following information. The other information comprises matters which I report to you if, in my opinion: information included in the annual report, other than the parts of the Accountability Report described in that • adequate accounting records have not been kept report as having been audited, the financial statements or returns adequate for my audit have not been and my auditor’s report thereon. My opinion on received from branches not visited by my staff; or the financial statements does not cover the other • the financial statements and the parts of the information and I do not express any form of assurance Accountability Report to be audited are not in conclusion thereon. In connection with my audit of the agreement with the accounting records and financial statements, my responsibility is to read the returns; or other information and, in doing so, consider whether the other information is materially inconsistent with the • I have not received all of the information and financial statements or my knowledge obtained in the explanations I require for my audit; or audit or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude • the Governance Statement does not reflect that there is a material misstatement of this other compliance with HM Treasury’s guidance. information, I am required to report that fact. I have nothing to report in this regard. Report I have no observations to make on these financial Opinion on other matters statements. In my opinion:

• the parts of the Accountability Report to be audited have been properly prepared in accordance with the Financial Reporting Manual as adapted or interpreted for the House of Commons context; • in the light of the knowledge and understanding of the House of Commons Administration and its environment obtained in the course of the audit, I have not identified any material misstatements in the Performance Report or the Accountability Report; and

• the information given in the Performance and Accountability Reports for the financial year for which the financial statements are prepared is consistent with the financial statements.

Sir Amyas C E Morse KCB Comptroller and Auditor General National Audit Office 157-197 Buckingham Palace Road Victoria, London, SW1W 9SP

17 July 2018 Annual Report and Accounts 2017–18 Financial Statements

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03 Financial Statements

Statement of Comprehensive Net Expenditure 90 Statement of Financial Position 91 Statement of Cash Flows 92 Statement of Changes in Taxpayers’ Equity 93 Notes to the Accounts 94 © UK Parliament/Mark Duffy

Annual Report and Accounts 2017–18 Financial Statements

90 Financial Statements Statement of Comprehensive Net Expenditure

For the Year ended to 31 March 2018 This account summarises the expenditure and income which include changes to the values of non-current generated and consumed on an accruals basis. It also assets and other financial instruments that cannot yet includes other comprehensive income and expenditure, be recognised as income or expenditure.

2017–18 2016–17 Note £000 £000 Income from sale of goods & services 5 (17,510) (16,732) Other operating income - - Total operating income (17,510) (16,732)

Staff costs 3 113,860 105,358 Purchase of goods & services 3 99,481 97,571 Depreciation & Impairment 3 26,828 20,721 Grants 3, 4 3,548 3,605 Other costs/(gain) 3 4,554 490

Total operating expenditure 248,271 227,745

Net expenditure before transfer of estimate 230,761 211,013

Transfer of estimate (2,068) -

Net expenditure for the year 228,693 211,013

Other Comprehensive Net Expenditure 2017–18 2016–17 £000 £000 Items which will not be reclassified to net operating costs: - revaluation of Property, Plant and Equipment 2.1 (174,213) 38,347

Comprehensive net expenditure for the year 54,480 249,360 Financial Statements Annual Report and Accounts 2017–18

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Statement of Financial Position

As at 31 March 2018 This statement presents the financial position of the House. It comprises three main components: assets owned or controlled; liabilities owed to other bodies; and equity, the remaining value of the entity.

31 March 31 March 2018 2017 Note £000 £000 £000 £000 Non-current assets: Property, plant and equipment 6 1,493,350 1,153,729 Intangible assets 8 786 658 Total non-current assets 1,494,136 1,154,387

Current assets: Inventories 10 588 482 Trade and other receivables 12 15,731 12,156 Cash and cash equivalents 11 1,677 4,995 Total current assets 17,996 17,633

Total assets 1,512,132 1,172,020

Current liabilities Trade and other payables 13 (51,147) (44,449) Total current liabilities (51,147) (44,449)

Total assets less current liabilities 1,460,985 1,127,571

Non-current liabilities Provisions 14 (5,055) (4,614) Finance Lease liability 13 (111,728) - Total non-current liabilities (116,783) (4,614)

Total assets less liabilities 1,344,202 1,122,957

Taxpayers’ equity and other reserves: General fund 855,960 801,020 Revaluation reserve 486,942 320,648 House of Commons Commission reserve 1,300 1,289 Total equity 1,344,202 1,122,957

Sir David Natzler KCB, Accounting Officer, House of Commons, 13 July 2018 Annual Report and Accounts 2017–18 Financial Statements

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Statement of Cash Flows

For year ended 31 March 2018 The Statement of Cash Flows shows the changes in cash operations are funded by way of income from the and cash equivalents of the House during the reporting recipients of services provided by the House. Investing period. The statement shows how the House generates and activities represent the extent to which cash inflows uses cash and cash equivalents by classifying cash flows as and outflows have been made for resources which are operating, investing and financing activities. The amount intended to contribute to the Houses’ future public service of net cash flows arising from operating activities is a key delivery. Cash flows arising from financing activities indicator of service costs and the extent to which these include Parliamentary Supply and other cash flows.

2017–18 2016–17 Note £000 £000 Cash flows from operating activities Net operating cost (230,761) (211,013) Adjustments for non-cash transactions 3 31,382 21,211 (Increase)/Decrease in trade and other receivables 12 (3,575) 9,478 (Increase)/Decrease in inventories 10 (106) 51 Increase/(Decrease) in trade payables 13 10,027 (4,291) Less movements in payables not passing through SCNE 9.3 (5,272) - Use of provisions 14 (133) (433) Transfer of estimate26/Donated Asset 6 (16) (15) Net cash outflow from operating activities (198,454) (185,012)

Cash flows from investing activities Purchase of property, plant and equipment 6 (193,778) (46,361) Purchase of intangible assets 8 (397) (530)

Net cash outflow from investing activities (194,175) (46,891)

Cash flows from financing activities From the Consolidated Fund (Supply) – current year 272,300 233,433 Interest received on Commission Reserve Balance 11 1 Capital element of payment in respect of finance lease and on balance sheet 117,000 - (SOFP) Service concession contracts Net financing 389,311 233,434

Net increase/(decrease) in cash and cash equivalents in the period before and (3,318) 1,531 after adjustment for receipts and payments to the Consolidated Fund

Cash and cash equivalents at the beginning of the period 11 4,995 3,464

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

26 The transfer of estimate relates to non-cash items totalling £2,084,000. The net transfer of £2,068,000 includes cash items totalling £16,000. Financial Statements Annual Report and Accounts 2017–18

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Statement of Changes in Taxpayers’ Equity

For the year ended 31 March 2018 This statement shows the movement in the year on recorded here. The Revaluation Reserve reflects the the different reserves held by the House, analysed into change in asset values that have not been recognised ‘general fund reserves’ (i.e. those reserves that reflect as income or expenditure. Other earmarked reserves are a contribution from the Consolidated Fund). Financing shown separately where there are statutory restrictions and the balance from the provision of services are on their use.

General Revaluation Commission Total Fund Reserve Reserve Reserves Note £000 £000 £000 £000 Balance at 31 March 2016 775,455 363,583 1,288 1,140,326

Net Parliamentary Funding – 233,433 - - 233,433 drawn down Net Parliamentary Funding – 13 2,178 - - 2,178 deemed Supply (payable)/receivable 13 (3,706) - - (3,706) adjustment Net Operating Cost (211,013) - - (211,013) Non-Cash Adjustments Non-cash charges – auditor’s 3 85 - - 85 remuneration Movement in Reserves Additions - - 1 1 Recognised in Statement of - (38,347) - (38,347) Comprehensive Expenditure Transfers between reserves 4,588 (4,588) - - Balance at 31 March 2017 801,020 320,648 1,289 1,122,957 Net Parliamentary Funding – 272,300 - - 272,300 drawn down Net Parliamentary Funding – deemed 13 3,706 - - 3,706 Supply (payable)/receivable adjustment 13 (377) - - (377) Net Cost (228,693) - - (228,693) Non-Cash Adjustments Non-cash charges – auditor’s 3 85 - - 85 remuneration Movement in Reserves Additions - - 11 11 Recognised in Statement of - 174,213 - 174,213 Comprehensive Expenditure Transfers between reserves 7,919 (7,919) - - Balance at 31 March 2018 855,960 486,942 1,300 1,344,202 Annual Report and Accounts 2017–18 Financial Statements

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Notes to the Accounts Arrangements for security are agreed jointly by the authorities of both Houses of Parliament with the Metropolitan Police. These costs are monitored jointly by the authorities in the two Houses but are billed 1. Accounting conventions individually to the House of Commons and House of 1.1 Accounting policies Lords in a pre-determined ratio (70:30 for 2017–18). These financial statements have been prepared in The cost of the Parliamentary Security Department is accordance with the Financial Reporting Manual (FReM) also shared on the same ratio. as adapted or interpreted for the House of Commons The management of the ICT services for both Houses context which applies International Financial Reporting has been centralised within the Parliamentary Digital Standards (IFRS). Where the FReM permits a choice Service (PDS) (formerly Parliamentary Information of accounting policy, the policy which is judged to be and Communications Technology (PICT) service). PICT the most appropriate to give a true and fair view has (now PDS) formally became a joint department of been selected. The particular policies adopted by the both Houses on 1 April 2008 under the terms of the House of Commons are described below. They have Parliament (Joint Departments) Act 2007. Each House been applied consistently in dealing with items that are pays for its own ICT hardware with the costs of shared considered material to the accounts. services being split between the House of Commons In addition to the primary statements prepared under (70%) and House of Lords (30%). IFRS, the FReM also requires the House to prepare an additional primary statement. The Statement of 1.3 Property, plant and equipment Parliamentary Supply and supporting Notes show In accordance with International Accounting Standards outturn against Estimate in terms of the net resource (IAS 16), property assets (excluding the Palace of requirement and the net cash requirement. Westminster and special adaptations of Portcullis House) are valued at current value in existing use using These accounts have been prepared under the historical a method determined by the Valuation Office Agency cost accounting convention modified to account for the (VOA). The Palace of Westminster (including the Visitor revaluation of property. Other non-current assets are not Reception Building) and special adaptations of Portcullis generally re-valued unless the adjustments are material. House are valued at depreciated replacement cost due to their specialised nature. 1.2 Relationship with House of Lords The House of Commons and the House of Lords hold joint All property is subject to a full professional valuation stewardship of the Palace of Westminster. Responsibility at least every five years. Annual interim reviews are for maintenance of the Palace and the remaining parts of undertaken to ensure that asset values remain in line the Parliamentary Estate is shared between the Strategic with their fair value. Estates Team and the Parliamentary Maintenance Services Revaluation losses are taken first to reserves and then Team which is part of In-House Services. General estates to the Statement of Comprehensive Net Expenditure for expenditure, individual maintenance and building projects any loss in excess of previous revaluation gains. including the Curators Office are shared between the House of Commons (60%) and the House of Lords (40%) (i) Depreciated Replacement Cost and recharged accordingly, or solely allocated to the Depreciated replacement cost (DRC) is used for House of Commons or House of Lords. Other shared costs specialised properties which are unique, either due are split at agreed ratios for that service. to their design, configuration, size or nature and are rarely sold in the market. When producing a The Parliamentary Archives are a shared facility, operated DRC valuation, the general assumption is that the on behalf of both Houses by the House of Lords. The costs replacement cost is calculated using ‘a modern of the Archives are split between the House of Commons equivalent’, where the replacement asset provides (40%) and House of Lords (60%). the same service potential but in a contemporary The Parliamentary Procurement and Commercial Service setting. However, there are situations where the (PPCS) is a shared service, operated on behalf of both only way that a replacement asset could provide the Houses by the House of Lords. The cost of PPCS is split same service potential would be to reproduce the between the House of Commons (70%) and the House of actual building. Public Sector Accounting Standard Lords (30%). 17 (IPSAS 17) provides an example of a parliament building that would be reproduced (rather than Financial Statements Annual Report and Accounts 2017–18

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replaced) because of its significance to the operating lease basis. These properties are the community. The Palace of Westminster is a Grade car park at Abingdon Street, 10 and 11 Bridge One listed building and forms part of a UNESCO Street, and Units A, B and C in Portcullis House. World Heritage Site, therefore it is appropriate for it Investment properties in 49 and 50 Parliament to be valued on the basis of it being rebuilt ‘as is’. Street were subsumed into 53 Parliament Street during the refurbishment of that building. One component of the replacement cost calculation is the inflationary increase applied year on year to In accordance with IAS 40 investment property is the cost of build – this is the Tender Price Index valued at fair value and not depreciated. A full VOA (TPI). There is also a location factor for the London valuation is carried out at least every five years, with Borough of Westminster. These indices are estimates an annual interim review to ensure that asset values and are therefore subject to fluctuations, for are in line with their fair value. example, a one point movement in the TPI would There is a restriction on Abingdon Street car park. have approximately £3 million impact on the DRC Its use is restricted to that of an underground car valuation of the Palace of Westminster as a whole. park with public garden at ground level. The VOA provide a draft valuation in the Autumn preceding the year end using the forecast TPI and (v) Plant and machinery location indices. The VOA then monitor these indices Plant and machinery includes the Great Clock throughout the remainder of the year and notify the mechanism and In House Services’ catering equipment House of significant fluctuations, say over 3% for and vehicles. The Great Clock was previously valued both Houses to review and assess the impact. using appropriate indices at 31 March 2006. The cost of valuing the Great Clock outweighs the benefit The VAT position of the House is complex and provided, therefore there are no plans to re-value it. there are no comparators for the total rebuild of an Catering equipment and vehicles are not re-valued on asset of such unique and historic importance. The the grounds of not being material. most prudent decision based on current HMRC guidelines to government departments at 31 March (vi) Equipment 2018 is that the valuation would include VAT. The In accordance with IAS 16 computers, assumption will be kept under review to reflect any contemporary furniture and other equipment are future changes or clarifications. The total amount of recognised at depreciated historic cost due to short VAT recognised within the valuation is estimated to life and/or low value. Although the capitalisation be around £155 million (House of Commons only). threshold is £1,000, certain ICT equipment (including desktop computers, monitors and (ii) Freehold properties printers below the threshold) are considered to be Title to freehold land and buildings is held as grouped assets and therefore are capitalised. follows: 1.4 Donated assets • The Palace of Westminster by the Sovereign. Donated assets are capitalised at fair value with the • Property on the House of Commons part of the credit entry made to income. Parliamentary Estate by the Corporate Officer of Donated assets currently comprise works of art and are the House of Commons (the Clerk of the House). not subject to a depreciation charge in line with House policy on works of art. The whole of the Parliamentary Estate was re-valued in full by the VOA as at 31 March 2018. 1.5 Heritage Assets (iii) Long leasehold The FReM requires organisations to provide additional A property, 102 Rochester Row, is held on a long information, within the financial statements, of any leasehold and valued at fair value by the VOA. heritage assets held by them as at the year end. The standard defines Heritage Assets as: (iv) Investment properties ‘A tangible asset with historical, artistic, scientific, The House of Commons holds interests in land technological, geophysical or environmental qualities and buildings which are classified as investment that is held and maintained principally for its properties with the rental income being negotiated contribution to knowledge and culture.’ at arm’s length. All contracts are treated on an Annual Report and Accounts 2017–18 Financial Statements

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Each category of heritage asset held by the House of Parliamentary Art Collection are carried out by the Commons, along with their applicable accounting Curator’s Office, with the cost of conservation etc policy is detailed below. Further information regarding charged to the Statement of Comprehensive Net asset management policies can be found in Note 7. Expenditure. The individual works of art in the Collection are deemed to have indeterminate lives 1.6 Antique furniture and House of Commons and as such the House does not therefore consider it State Silver appropriate to charge depreciation. The House’s collection of antique furniture and State Silver is reported in the Statement of Financial Position 1.8 Antiquarian books at market value. The furniture collection consists mainly Almost all the House of Commons Library’s books of historical furniture, silver, clocks and ceramics. Due were acquired after the 1834 fire in the Palace of to the importance of these collections, all assets have Westminster, when most of the earlier stock was lost. been capitalised regardless of their individual value. During the second half of the 19th century, there was a deliberate policy of acquiring books that would have A valuation of the collections was carried out by been found in a country house library of that period. Bonhams and completed in March 2016. As a result, the Library acquired through a mixture of It is the House’s policy to maintain its collection of purchase, gifts and legacies a wide-ranging collection antique furniture and State Silver in full working order of books, including some that are now of considerable and maintenance costs are charged to the Statement of antiquarian or scholarly interest. Comprehensive Net Expenditure when incurred. Both the The House of Commons antiquarian book collection antique furniture collection and the State Silver are deemed was moved to the in June 2003 when to have indeterminate lives and as such the House does not the restoration of the King’s Library was finished. The consider it appropriate to charge depreciation. House Library has retained at Westminster any books with parliamentary connections or which might be 1.7 Parliamentary Art Collection needed for its normal services for Members. All the The Parliamentary Art Collection is the national books that have been moved to the British Museum collection of art relating to the history of Parliament. It remain in the Library’s catalogue and can be used at contains portraits of Parliamentarians and parliamentary Westminster if required. They also appear in the Central events, past and present, wall paintings, sculpture, Library catalogue of the British Museum, who are mosaics and tapestries, oil paintings and works of art responsible for routine conservation, and are available on paper within the Houses of Parliament. There is also under supervision for public use in the Museum. a collection of coins and medals with associations to former parliamentarians. In total the collection has circa The antiquarian books held by the British Museum 9,000 objects. are not valued in line with the practice adopted for the Parliamentary Art Collection. As such they are not For valuation purposes, the Parliamentary Art Collection shown in the Statement of Financial Position. is divided into two categories; those objects held as at

31 March 2000 and those objects acquired since that date. No valuation for the Collection at 31 March 2000 1.9 The Speaker’s state coach is currently included on the Statement of Financial The Speaker’s state coach is a 17th century gilded Position because obtaining a valuation for a collection and painted carriage. Following a programme of of this size and diversity would be costly. During conservation and repair in 2007–08, it was loaned to 2012–13, it was determined that the benefit received the National Trust for public display at the Carriage by a valuation exercise at this time would not justify the Museum at Arlington Court in Devon. As part of the expense incurred. This continues to be the position of loan agreement, the National Trust indemnifies the the House. coach for an indemnity value of £1.6 million. Acquisitions since 1 April 2000 have either been made The value of the Speaker’s state coach is not currently by purchase or donation. Purchases are recorded at cost valued on cost benefit and practicality grounds. It is and donations are recorded at current value ascertained not therefore shown in the Statement of Financial by the House’s Curator of Works of Art with reference, Position. where appropriate, to the commercial art market. The House’s duty of care responsibilities for the Financial Statements Annual Report and Accounts 2017–18

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1.10 Archives 1.12 Architectural salvage and estate archives (i) Broadcasting The architectural salvage collection consists of examples The broadcasting archive consists of audio and of architectural fragments from the Parliamentary video tape recordings of broadcast coverage from Estate such as pieces of decorative stonework and the Chambers in both Houses and also Committees wood carving. Many of these pieces have been retained selected by the broadcasters. In November 2015 to provide a record of the craftsmanship used in the the Broadcast Unit switched from tape to server Palace and Estate buildings throughout their life. Cost recording. 38,000 video tapes are held in the information is not readily available and the benefit collection in 7 Millbank. Audio dates from 1978 and of obtaining valuations would not justify the cost, the House of Commons video collection dates from therefore it has not been recognised in the Statement 1989. 35,000 audio tapes are held at the BFI. of Financial Position. In 2017 Parliament began the process of digitising The Estate Archive consists of Strategic Estates’ permanent the video tapes in order to preserve the content records such as plans and drawings which are not stored on the ageing video tapes. Audio tapes will recognised in the Statement of Financial Position because continue to be held in storage. cost information is not readily available and the benefit of obtaining valuations would not be cost effective. Nearly all The archive is valuable in an historical sense but is the items are thought to have nominal financial value and difficult to quantify in practice. The content is made no item is worth more than £1,000. freely available as duplicated copies to anyone who orders it with a small fee applied to cover the costs 1.13 Depreciation of transfer. Consequently, the value for this archive is Depreciation is charged to expenditure on the historic not included on the Statement of Financial Position. value or, for buildings, the re-valued amount of assets. (ii) Parliamentary Archives For buildings, that element of the depreciation which The Parliamentary Archives comprise several million relates to the increase in valuation in prior years is documents that have been preserved at the Palace charged to the Revaluation Reserve. This amount is of Westminster from 1497 to date in a variety of realised by transferring the Revaluation Reserve to the formats from medieval vellum and parchment to General Fund over the remaining useful life of the born-digital and digitised records. Parliamentary asset. Land assets are not depreciated. records prior to 1497 form part of the National Depreciation is charged on a straight line basis. The Archives. Most of the records are unique and period over which to depreciate property assets is have been preserved for their historical, legal and advised by the Valuation Office Agency (VOA). The administrative importance, consequently it is not rates adopted are calculated to write off the valuation deemed cost effective to obtain a value. of freehold buildings, plant, equipment and intangible The Parliamentary Archives who provide the service assets by equal instalments over their estimated were established within the House of Lords in 1946. useful lives, with the exception of heritage assets (i.e. The administration costs of this service have been antique furniture, State Silver and the Parliamentary shared with the House of Commons since 1999. Any Art Collection with an estimated life of more than 200 operational assets held by the Parliamentary Archives years). Heritage assets are not depreciated because the are disclosed within the House of Lords Resource long remaining life or high residual value of the asset Accounts. The Parliamentary Archives publishes an makes any such charge immaterial. Capital works on Annual Report which is available via leasehold property are depreciated on a straight line www.parliament.uk. Full details of the Parliamentary basis over the lease period. The capitalised costs for Archives acquisition policy are also available at this assets in the course of construction are not depreciated web address. until the assets are brought into use. For accounting purposes the lives of the property, plant 1.11 Ceremonial items and equipment and intangible assets such as software The House’s collection of ceremonial items consists of licences are in the following ranges: four swords used by the Speaker’s Office. The value of the ceremonial items is not currently included on the Statement of Financial Position as it is not deemed practical to do so. Annual Report and Accounts 2017–18 Financial Statements

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Property: Years

Land not applicable

Palace of Westminster 71

Freehold property (excluding Portcullis House) 13–38

Portcullis House 45

Leasehold property 3–31

Plant and equipment: Years

Furniture - standard 10

Plant & machinery 5–10

Fixtures and fittings - standard 10

General office equipment 3–5

IT equipment including telephony 3–5

Broadcasting equipment 10

Intangible assets 3–5

Heritage Items: Years

Antique furniture and Works of Art Indefinite

1.14 Intangible assets 1.17 Impairment Intangible non-current assets are primarily software The House of Commons reviews its assets for licences and other ICT enhancements provided by impairment and accounts for any adjustments in third parties costing in excess of £1,000. These are accordance with the FReM (as adapted for the House). capitalised and amortised over the expected useful life of the asset. 1.18 Operating income Operating income relates directly to the operating 1.15 Current investments activities of the House of Commons and includes, The House of Commons holds short term current refreshments, retail and visitor ticket sales, videos, investments. These are all held in cash and are included fees from filming, private bill fees, and royalties. Fees in the “Bank and Cash in Hand” figures. Interest and charges are set in accordance with the House receivable on the House of Commons Commission of Commons policy which is published via www. Reserve is credited to that reserve. Any other interest parliament.uk/site-information/foi/transparency- received is treated as operating income. publications/hoc-transparency-publications/ financial-information/financial-policies 1.16 Inventories Inventories are valued as follows: 1.19 Foreign exchange Transactions which are denominated in foreign currency • Finished goods and goods for resale are valued are translated into sterling at the exchange rate ruling at cost or, where materially different at current on the date of each transaction. replacement cost, and at net realisable value only when they either cannot or will not be used. 1.20 Leases • Work in progress is valued at the lower of In accordance with IAS17, leases are capitalised only cost, including appropriate overheads, and net when substantially all risks and rewards of ownership realisable value. are transferred to the lessee. During the year the House occupied Richmond House under terms which were considered to be a Finance lease (see Note 9.3). Financial Statements Annual Report and Accounts 2017–18

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1.21 Private Finance Initiative (PFI) transactions 2. Statement of Net Expenditure by Operating During 2013–14 the House entered into a service Segment concession agreement (see Note 9.2). This contract Each of the House of Commons Teams (or segments) has been disclosed in accordance with the appropriate report their resource spend separately on a monthly basis accounting standards (IFRIC 12: Service Concession to the Commons Executive Board. Total Assets and net Arrangements and IAS 17: Leases). assets are managed and controlled at a corporate level.

1.22 Contingent liabilities The work of each Team is described briefly below. Where the time value of money is material, contingent Chamber and Committees (CCT): provides secretariat, liabilities which are required to be disclosed under advice, procedural, reporting and other services that IAS 37 are stated at discounted amounts. Contingent support the work of the Chamber and committees, and liabilities that are not required to be disclosed by IAS 37 supports the House’s international relations. are stated at the estimated current amounts. In-House Services (IHS): provides the accommodation, 1.23 VAT and Corporation Tax logistics, catering, retail, estate and asset management, Irrecoverable VAT is charged to the relevant expenditure environmental management, fire safety, business category or included in the capitalised purchase cost of continuity and other facilities required by the House. fixed assets. Where output tax is charged or input VAT Strategic Estates (SE): brings together all teams is recoverable, the amounts are stated net of VAT. delivering capital investment along with supporting The House is not subject to Corporation Tax. property, planning and design teams. Corporate Services (CS): is responsible for corporate 1.24 Third party assets strategy and planning. It develops HR and finance The House of Commons holds third party assets in policies to support internal customers across the the form of gratuities and service charges on behalf House, organisational development and monitoring of of catering staff. performance.

1.25 Impending application of newly issued Participation (PAR): seeks to engage the public in accounting standards not yet effective the work Parliament does. It provides educational and There are no newly issued accounting standards not yet visitor tours and retail services. effective that would have a significant impact on these Research and Information (R&I): informs the work of financial statements. IFRS 9 (Financial Instruments), the House and its Members. IFRS 15 (Revenue from Contracts with Customers) will be effective from reporting periods beginning after 1 Parliamentary Digital Services (PDS): a joint January 2018 and IFRS 16 (Leases) will be effective from department with the House of Lords which provides reporting periods beginning after 1 January 2019. The information and communications technology services impact of IFRS 9 and 15 on the 2018–19 accounts is to both Houses of Parliament, including the funding not expected to be material. The impact of IFRS 16 on set aside for investment on ICT related programmes the 2019–20 accounts has yet to be determined. and projects. The Parliamentary Security Department (PSD): 1.26 Segmental Reporting is responsible for the strategy, planning and overall The analysis provided at Note 2 meets the reporting delivery of security across the Parliamentary Estate, requirement of International Financial Reporting including cyber security. The Director chairs the Standard, Operating Segments (IFRS 8). Parliamentary Security Board.

1.27 House of Commons Commission Reserve Central Provision (CP): covers other centrally held Under the powers provided by the House of Commons funds. (Administration) Act 1978 as amended by the In addition to the Teams listed above there are a Government Resources and Accounts Act 2000, the number of smaller offices, which for the purpose of this House of Commons Commission has established a report are merged into one segment: reserve for any excess income generated. Agreement of the Commission is required before any sums can be Governance Office (GO): supports the Clerk of drawn down. the House of Commons in his roles as Accounting Officer and Corporate Officer, and provides assurance Annual Report and Accounts 2017–18 Financial Statements

100 to him through risk management, health and safety Communications (CO): promotes the work of reporting and internal audit. It includes the secretariats the House Service to Members and Members’ staff for the House of Commons Commission, the Finance and is also responsible for House-wide corporate and Administration Committees and other domestic communications and media engagement. committees. It also supports the Commons Executive Office of the Speaker (SPK): is responsible for Board and the Director General. supporting all aspects of the Speaker’s duties which

include the Chamber, honours and awards and

representative matters. Staff in the Speaker’s Office, help organise the Speaker’s meetings, talks and visits to public groups, schools and colleges across the UK.

2017–18 CCT IHS SE CS PAR R&I PDS GO/SPK PSD CP Total & CO

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

Gross 35,054 44,826 60,604 11,075 8,680 12,504 38,829 4,842 28,648 3,209 248,271 Expenditure

Income (521) (10,485) (1,921) (44) (4,299) (18) (87) (17) (118) (2,068) (19,578)

Net 34,533 34,341 58,683 11,031 4,381 12,486 38,742 4,825 28,530 1,141 228,693 Expenditure

Total assets 1,512,132

Net assets 1,344,202

Financial Statements Annual Report and Accounts 2017–18

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2016–17 CCT IHS SE CS PAR R&I PDS GO/SPK PSD CP Total & CO

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

Gross 35,396 40,546 55,290 14,923 8,703 11,351 27,576 4,629 25,348 3,983 227,745 Expenditure

Income (393) (10,248) (940) (477) (4,570) - (2) (99) (3) - (16,732)

Net 35,003 30,298 54,350 14,446 4,133 11,351 27,574 4,530 25,345 3,983 211,013 Expenditure

Total assets 1,172,020

Net assets 1,122,957

2.1. Reconciliation between Operating Segments and Statement of Comprehensive Net Expenditure

2017–18 2016–17

£000 £000 Total net expenditure reported for operating segments 228,693 211,013

Net (gain)/loss on revaluation of Property, Plant and Equipment (174,213) 38,347 Net (gain)/loss pension liabilities due to changes in actuarial assumptions - - Total net expenditure per Statement of Comprehensive Net Expenditure 54,480 249,360

The revaluation of the Parliamentary Estate during the financial year resulted in a net gain of £170,345,000 reflecting an improvement in the property market and changes to the tender price index and location factor used for interim valuations. The net revaluation gain of £170,345,000 has been allocated between the Revaluation Reserve (gain: £174,213,000) and the Statement of Comprehensive Net Expenditure (loss: £3,868,000). Annual Report and Accounts 2017–18 Financial Statements

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3. Expenditure

2017–18 2016–17 Note £000 £000 £000 £000 Grants 4 3,548 3,605 Goods and services Accommodation services 29,172 33,394 Security 18,648 15,461 Information 2,176 2,644 Computer maintenance 13,128 8,803 Finance and specialist services 5,227 4,521 Catering and other supplies 4,280 4,457 Communications 5,863 3,005 Other staff costs 3,589 3,272 Travel and subsistence 2,092 2,641 Broadcasting 1,264 1,336 Office supplies 1,002 604 86,441 80,138 Rentals under operating leases Buildings rental 11,787 16,006 Other rental 636 721 12,423 16,727 Interest charges - - Service Concessionary Arrangements Service charge element of Finance Lease 605 677 Interest on Finance Lease 12 29 617 706 Non-cash items Depreciation 6 26,291 19,679 Amortisation 8 269 273 Impairment 6 268 769 (Profit)/loss on disposal of property, plant & equipment 6 27 - Net (gain)/loss on revaluation of property, plant and equipment 2.1 3,868 (130) Auditors’ remuneration and expenses27 85 85 Provisions 14 574 535 31,382 21,211 Sub total 134,411 122,387 Staff Costs28 113,860 105,358

Grand Total 248,271 227,745

27 Auditors have received no remuneration for non-audit work 28 See Accountability Report, page 72 for details of staff costs Financial Statements Annual Report and Accounts 2017–18

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4. Grants paid

2017–18 2016–17 £000 £000 Commonwealth Parliamentary Association (UK Branch) 1,273 1,261 History of Parliament Trust 1,156 1,139 Inter Parliamentary Union (British Group) 873 910 British Irish Parliamentary Assembly 91 104 British American Parliamentary Group 80 79 Association of Former Members of Parliament 13 12 Other parliamentary (various) 62 100

Total 3,548 3,605

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

2017–18 2016–17 £000 £000 Receipts from sales 14,321 15,245 Rental receipts and associated charges 929 939 Other receipts 2,248 506 Fees on private bills 12 15 Grants (from the Speaker’s Art Fund) - 12 Sub-total 17,510 16,717 Donated Asset (see note 6 for details) - 15 Total 17,510 16,732

Annual Report and Accounts 2017–18 Financial Statements

104 - - - 6 (93) (66) Total £000 (268) 6,354 4,270 26,291 193,778 480,117 835,159 309,772 1,988,888 2,668,776 1,175,42 1,153,729 1,493,350 ------

£000 (970) 9,808 9,808 under Assets 24,595 33,433 33,433 construction - - - -

(93) 938 (66) £000 (268) 3,896 6,354 3,230 4,270 6,606 9,999 23,023 33,850 16,417 23,851 Technology Information ------

216 639 £000 6,632 6,848 1,990 2,629 4,642 4,219 Plant and Machinery ------

247 285 £000 3,421 3,668 1,906 2,191 1,515 1,477 Furniture & Fittings ------

67 32 £000 Assets 25,490 25,589 25,490 25,589 Heritage ------

287 216 £000 1,388 1,719 2,222 16,184 17,572 14,465 15,350 Dwellings ------

£000 21,850 105,597 485,900 813,127 309,556 894,555 Buildings 1,707,682 2,302,179 1,144,533 1,157,646 ------

Land £000 56,160 (7,171) 196,648 245,637 196,648 245,637

29 30 The transfer of Members IT assets which has a carrying value £2,084,000 (£6,354,000 less £4,270,000). Agency Office FRICS of Valuation Seabrook, 2018 by Marc valued in March Land and Buildings were Additions of estimate/Donations Transfer Disposals Impairments Reclassifications Revaluations At 1 April 2017 Charge in the year of Estimate Transfer Disposals Impairments Reclassifications Revaluations 29 30 Cost or valuation As at 1 April 2017 2018 At 31 March Depreciation 2018 At 31 March Carrying amount at 2017 31 March Carrying amount at 2018 31 March 6. Property, plant and equipment 6. Property, Richmond House is included in Land and Buildings as a finance lease. The carrying value for the asset £116,512,000 (Land £56, 160,000, buildings £60,352,000) Financial Statements Annual Report and Accounts 2017–18

105 - -

15 (17) (17) (87) Total £000 (856) 46,361 19,679 (66,777) 844,144 (28,560) 835,159 2,010,162 1,988,888 1,166,018 1,153,729 ------

336 336 £000 (304) 9,776 9,808 9,808 construction Assets under ------

(17) (17) £000 3,160 1,946 5,539 6,606 20,027 23,023 14,488 16,417 (147) Technology Information ------

268 608 £000 6,364 6,632 1,382 1,990 4,982 4,642 Plant and Machinery ------

472 287 £000 2,949 3,421 1,619 1,906 1,330 1,515 Furniture & Fittings ------

19 15 57 £000 Assets 25,399 25,490 25,399 25,490 Heritage ------

62 276 £000 1,381 1,719 15,516 668 16,184 14,135 14,465 Dwellings - - - -

247 (87) £000 (709) 32,666 16,562 (77,466) 825,274 (28,622) 813,127 927,670 894,555 Buildings 1,752,944 1,707,682 ------

Land £000 10,021 186,627 196,648 186,627 196,648 33 32 31 A donation of £15,000 from the National Secular Society was made towards the purchase of a bronze portrait bust of Charles Bradlaugh. of a bronze the purchase the National Secular Society was made towards A donation of £15,000 from The building impairment includes the £0.7 million investment in 39 Victoria Street Agency. Office FRICS of Valuation Seabrook, 2017 by Marc valued in March Land and Buildings were Additions Donations Disposals Impairments Reclassifications Revaluations At 1 April 2016 Charge in the year Disposals Impairments Reclassifications Revaluations 31 32 33 Cost or valuation As at 1 April 2016 Depreciation 2017 At 31 March Carrying amount at 2016 31 March Carrying amount at 2017 31 March At 31 March 2017 At 31 March 6. 2016-17 comparator figures Annual Report and Accounts 2017–18 Financial Statements

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Land and Buildings analysed by Net Book Value Analysed by individual land, buildings and investment property

31 March 2018

Land Buildings Investment Total

£000 £000 £000 £000 Palace of Westminster34 82,200 726,518 - 808,718 Portcullis House 41,796 276,624 - 318,420 Richmond House 56,160 60,352 - 116,512 Norman Shaw North 20,628 16,878 - 37,506 1 Parliament Street 14,517 12,873 - 27,390 Norman Shaw South 10,083 9,687 - 19,770 1 Derby Gate 9,247 7,877 - 17,124 1 Canon Row 7,933 6,417 - 14,350 49-53 Parliament Street 3,073 5,015 - 8,088 Visitors Reception building - 9,134 - 9,134 Improvements to leasehold buildings - 3,788 - 3,788 Education centre - 4,300 - 4,300 3 Parliament Street 2,496 2,304 - 4,800 2 Parliament Street 2,015 1,935 - 3,950 4 Canon Row 1,300 1,200 - 2,500 2 Canon Row 1,291 1,149 - 2,440 102 Rochester Row 387 473 - 860 22 John Islip Street 600 200 - 800 Abingdon St Car Park - - 4,773 4,773 Units A, B & C Portcullis House - - 7,600 7,600 10 Bridge Street - - 4,260 4,260 11 Bridge Street - - 1,550 1,550 Net Book Value at 31 March 2018 253,726 1,146,724 18,183 1,418,633

34 The total value of the Palace at 31 March 2018 was £1,347,865,000 (House of Commons’ share £808,718,000) Financial Statements Annual Report and Accounts 2017–18

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31 March 2017

Land Buildings Investment Total £000 £000 £000 £000 Palace of Westminster35 90,000 567,130 - 657,130 Portcullis House 42,291 230,644 - 272,935 Norman Shaw North 20,692 16,258 - 36,950 1 Parliament Street 14,066 13,514 - 27,580 Norman Shaw South 9,986 9,985 - 19,971 1 Derby Gate 8,986 8,294 - 17,280 1 Canon Row 7,499 6,473 - 13,972 49 -53 Parliament Street 3,128 4,693 - 7,821 Visitors Reception building - 7,340 - 7,340 Improvements to leasehold buildings - 4,117 - 4,117 Education centre - 4,945 - 4,945 3 Parliament Street 2,137 2,138 - 4,275 2 Parliament Street 1,961 1,739 - 3,700 4 Canon Row 1,430 1,170 - 2,600 2 Canon Row 1,165 1,165 - 2,330 102 Rochester Row 387 473 - 860 22 John Islip Street 525 175 - 700 Abingdon St Car Park - - 4,794 4,794 Units A, B & C Portcullis House - - 10,380 10,380 10 Bridge Street - - 3,868 3,868 11 Bridge Street - - 2,120 2,120 Net Book Value at 31 March 2017 204,253 880,253 21,162 1,105,668

35 The total value of the Palace at 31 March 2017 was £1,095,217,000 (House of Commons’ share £657,130,000) Annual Report and Accounts 2017–18 Financial Statements

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7. Heritage assets

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

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

Many of the items are in continual use throughout the dispose of items from the collection, although this will Estate. Those items in storage are either held on-site or only happen in exceptional circumstances and will be by a third party in secured off-site storage facilities. in accordance with the Museum Association’s disposal policy36. The vast majority of items in the collection were The House’s detailed management, preservation, acquired over 40 years ago. disposal and access policy have been approved by the Parliamentary Estates Forum. Subject to the approval Note 6 includes the value of the Antique furniture of the House, the Head of Collection (Furniture and (£15,573,970) plus House of Commons State Silver Decorative Arts) in the In-House Services Team, may (£2,612,120).

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

2017–18 2016–17 2015–16 2014–15 2013–14 £000 £000 £000 £000 £000 At 1 April 16,280 16,280 16,267 16,254 16,254 Additions - - 13 13 - At 31 March 16,280 16,280 16,280 16,267 16,254

36 www. museumsassociation.org/collections/disposal-toolkit-and-training Financial Statements Annual Report and Accounts 2017–18

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

The collection comprises the following categories:

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

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

2017–18 2016–17 2015–16 2014–15 2013–14 £000 £000 £000 £000 £000 At 1 April 7,305 7,214 7,118 6,737 1,669 Additions 67 76 71 31 68 Donations - 15 25 350 5,000 At 31 March 7,372 7,305 7,214 7,118 6,737

The Parliamentary Art Collection is managed by the The Advisory Committee seeks to acquire works of art Curator’s Office, which is responsible for all aspects of for the House of Commons Collection which fall into its management, care, conservation, documentation, one or more of the following categories: presentation and interpretation in accordance with the policies that are approved by the Speaker’s Advisory • Portraiture Committee Works of Art. Further details, including • Parliamentary history examples of some of the artwork, can be found on the ‘Art in Parliament’ website at www.parliament.uk/art. • Political satire

• Political commemoratives

• The United Kingdom and Parliament today Annual Report and Accounts 2017–18 Financial Statements

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An active loans policy is pursued, with works of art 7.4 Ceremonial items acquired on loan to fill gaps in the Collection. Loans are The House’s collection of ceremonial items consists of from both public bodies and private individuals. Loans the Mace, Swords and Medallions. Not all the items are will not be accepted from bodies or individuals which owned by the House; many are owned by the Crown would be seen to compromise the integrity of the and are returned to St James Palace for safekeeping House, and therefore the identity of each lender must when Parliament is dissolved: be made known in advance of the loan proceeding. The House of Commons will not acquire, whether by • The Mace is on loan from the Royal Household purchase, gift, bequest or transfer, any work of art or who bear the cost of any repairs that are required. object unless the Works of Art Committee is satisfied • The Speaker’s Office own four ceremonial swords that the Collection can acquire a valid title to the item and maintenance costs are charged to the in question, and that in particular it has not been Statement of Comprehensive Net Expenditure acquired in, or exported from, its country of origin (or when incurred. any intermediate country in which it may have been legally owned) in violation of that country’s laws. • There are forty two medallions which are worn The House’s disposal policy for the Parliamentary Art by the Doorkeepers during parliamentary term Collection was approved during 2012–13. time. Like the Mace, these are not owned by the House but are on loan from the Royal Household, 7.3 Medals hence their value is not included in the Statement of Financial Position. However, unlike the Mace, The Parliamentary Art Collection also includes a medal the House is responsible for the maintenance collection. The collection consists of awards instituted of the medallions and costs are charged to the by the British Crown and issued to the armed forces Statement of Comprehensive Net Expenditure over the last two centuries as well as medals for when incurred. gallantry awarded to civilians. A total of 546 medals are recorded in the collection on public display in the Medals Corridor in the House of Commons where it can be viewed. Financial Statements Annual Report and Accounts 2017–18

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

Assets under Software Trademarks & construction Licences Artistic Originals Total

£000 £000 £000 £000

Cost or valuation

At 1 April 2017 - 2,620 16 2,636

Additions - 397 - 397

Disposals - - - -

Reclassifications - - - -

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

Amortisation

At 1 April 2017 - 1,976 2 1,978

Charged in year - 268 1 269

Disposals - - - -

Reclassifications - - - -

At 31 March 2018 - 2,244 3 2,247

Carrying amount at 31 March 2017 - 644 14 658

Carrying amount at 31 March 2018 - 773 13 786

Assets under Software Trademarks & construction Licences Artistic Originals Total

£000 £000 £000 £000

Cost or valuation

At 1 April 2016 6 2,090 10 2,106

Additions - 530 - 530

Disposals - - - -

Reclassifications (6) - 6 -

At 31 March 2017 - 2,620 16 2,636

Amortisation

At 1 April 2016 - 1,704 1 1,705

Charged in year - 272 1 273

Disposals - - - -

Reclassifications - - - -

At 31 March 2017 - 1,976 2 1,978

Carrying amount at 31 March 2016 6 386 9 401

Carrying amount at 31 March 2017 - 644 14 658 Annual Report and Accounts 2017–18 Financial Statements

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9. Capital and other commitments

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

2017–18 2016–17 £000 £000 Obligations under operating leases comprise: Buildings Not later than one year 10,848 10,849 Later than one year and not later than five years 29,540 36,469 Later than five years 27,530 31,472 Total 67,918 78,790

Other37 Not later than one year 435 519 Later than one year and not later than five years 254 301 Later than five years - - Total 689 820

37 In accordance with International Accounting Standards, the House is required to disclose details of all lease arrangements. The House has an option agreement with CEVA Logistics Ltd, provider of services relating to the Off-Site Consolidation Centre that could result in the House funding the lease costs of the warehouse that is used, however this agreement can only be triggered by the House. Financial Statements Annual Report and Accounts 2017–18

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9.2 Commitments under PFI and other service concession arrangements (i) On-balance sheet (SoFP) During 2013–14, the Houses of Parliament contracted of the Houses of Parliament and is capitalised. with a supplier to provide and maintain specific parts Consequently, the contract is considered to include of the IT network. Under IFRIC 12, the provision of a finance lease comprising two elements – imputed assets by the supplier is considered to be an asset finance lease charges and service charges.

Details of the imputed finance lease charges are given in the table below for each of the following periods. 2017–18 2016–17 £000 £000

Rentals due within one year 28 342 Rentals due later than one year but not later than five years - 28 Rentals due later than five years - - Sub-total 28 370 Less: interest element - (12) Present value of obligations 28 358

Details of the minimum service charge are given in the table below for each of the following periods. 2017–18 2016–17 £000 £000

Service charge due within one year 38 463 Service charge due later than one year but not later than five years - 38 Service charge due later than five years - -

Total 38 501

(ii) Charge to the Statement of Comprehensive Net balance sheet (SoFP) PFI or other service concession Expenditure and future commitments transactions and the service element of on-balance The total amount charged in the Statement of sheet PFI or other service concession transactions Comprehensive Net Expenditure in respect of off- was £605,000 (2016–17: £677,000).

9.3 Finance Lease (i) Finance Lease liability lease for Richmond House has been written down During 2017–18, the House agreed a lease with over the useful life of the building (27 years).The fair DCLG for Richmond House covering the period from value of the lease is valued at £117,000,000 (Land the date of occupation, 12 January 2018 to July 2019 £56,160,000; Building £60,840,000). at a peppercorn rent. It is the intention of all parties that in July 2019, the property will be transferred to the House for no consideration. This transaction has been treated as a finance lease.The finance Annual Report and Accounts 2017–18 Financial Statements

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2017–18

£000

Finance lease creditor 117,000 Write down in year (938)

116.062

Creditor falling due within 1 year 4,334 Creditor falling after due after 1 year 111,728

9.4 Capital commitments 2017–18 2016–17 £000 £000 Contracted capital commitments at 31 March not otherwise included in 59,658 42,023 these financial statements for property, plant and equipment.

9.5 Financial instruments Interest rate risk All of the House’s financial assets and liabilities carry As the cash requirements of the House are met through fixed or nil rates of interest. The House is not therefore the Estimates process, financial instruments play a more exposed to significant interest rate risk. limited role in creating and managing risk than would apply to a non-public sector body of a similar size. The Foreign currency risk majority of financial instruments relate to contracts for Foreign currency would not usually form part of the non-financial items in line with the House’s expected House’s assets or liabilities and as such it is not exposed purchase and usage requirements and the House is to any significant exchange risks. therefore exposed to little credit, liquidity or market risk. Fair values Liquidity risk The fair values of the House primary financial assets and The House of Commons is financed by resources voted liabilities as at 31 March 2018 are the same as the book annually by Parliament. As such it is not exposed to values shown in the Statement of Financial Position. significant liquidity risks. Financial Statements Annual Report and Accounts 2017–18

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10. Inventories

2017–18 2016–17 £000 £000

Retail 413 354 Catering 68 25 Store equipment 74 74 Other 33 29 588 482

11. Cash and cash equivalents

2017–18 2016–17 £000 £000 Balance at 1 April 4,995 3,464 Net change in cash and cash equivalent balances (3,318) 1,531 Balance at 31 March 1,677 4,995 The following balances at 31 March were held at: Government Banking Service 138 3,311 Commercial banks and cash in hand 239 395 House of Commons Commission Reserve account 1,300 1,289 (see note 1.27) Balance at 31 March 1,677 4,995

Annual Report and Accounts 2017–18 Financial Statements

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12. Trade receivables, financial and other assets

2017–18 2016–17 £000 £000 Amounts falling due within one year: Trade receivables* 9,057 2,901 Deposits and advances 620 594 VAT and other taxes 696 989 Prepayments and accrued income 4,716 6,012 Sub-total 15,089 10,496 Amounts falling due after more than one year: Prepayments and accrued income 642 1,660 Total 15,731 12,156

* The large increase in trade receivables is mainly due to the increase (£4.6 million) in the House of Lords debtor figure. The House of Commons operates an imprest arrangement with the House of Lords – the House of Lords make payments ‘on account’ which is then off-set against actual costs incurred. The larger than expected balance at the end of the year indicates that more costs were incurred than paid on account.

13. Trade payables and other current liabilities

2017–18 2016–17 £000 £000 Amounts falling due within one year: Other taxation and social security 2,854 2,723 Trade payables 3,866 2,416 Other payables 3,154 5,851 Accruals and deferred income 36,534 29,395 Current part of imputed finance lease element of on-balance sheet 4,362 358 (SoFP) service concession arrangements Sub-total 50,770 40,743

Amounts issued from the Consolidated Fund for supply but not spent 377 3,706 at year end Total 51,147 44,449 Amounts due to be paid after one year* 111,728 -

* The figure of £111.7 million for ‘amounts due to be paid after one year’ is the accounting impact of the finance lease for Richmond House. Financial Statements Annual Report and Accounts 2017–18

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14. Provisions for liabilities and charges

Legal Claims & Dilapidation Departures Total Other Costs £000 £000 £000 £000 Balance at 1 April 2016 21 4,116 375 4,512 Provided in the year 133 351 51 535 Provisions not required written back - - - - Provisions utilised in the year (58) - (375) (433) Borrowing costs (unwinding of discounts) - - - - Balance at 31 March 2017 96 4,467 51 4,614 Provided in the year 188 351 35 574 Provisions not required written back - - - - Provisions utilised in the year (82) - (51) (133) Borrowing costs (unwinding of discounts) - - - - Balance at 31 March 2018 202 4,818 35 5,055

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

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

Obligation Increase expired in 31 March 1 April 2017 in year year 2018 £000 £000 £000 £000 Personal injuries and employee claims 310 14 (281) 43 Annual Report and Accounts 2017–18 Financial Statements

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16. Related-party transactions During the year, no Board member has undertaken As Members of Parliament, any related party any material transactions with the House of Commons transactions of Commission Members should be during the year. recorded in the Register of Members’ Interests. The House of Lords and the House of Commons share J Benger by virtue of his position as Clerk Assistant, some buildings and services. These include the Palace is a Trustee of the History of Parliament Trust, which of Westminster, together with services provided by receives a grant from the House of Commons. the Parliamentary Estates Directorate, Parliamentary Archives, Parliamentary Digital Services, and certain D Natzler KCB, the Clerk of the House and M Barrett, Education and Outreach activities. the Finance Director were both Trustees of the Speaker’s Art Fund during 2017-18, which receives a donation These joint arrangements are charged between the two in lieu of commission on sales from the House of Houses on an agreed percentage basis of underlying Commons (Participation). costs for each service (certain accommodation and overhead costs are excluded). Each House includes its P Young, a member of the Board, is a Trustee for the share of the relevant asset base and/or service cost in Speakers Parliamentary Placement Scheme which their Annual Accounts. receives a donation from the Members’ Estimate.

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

House of Commons House of Lords

Communications services, POST 70% 30%

Visitor Tours 70% 30%

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

Broadcasting services 60% 40%

Parliamentary Archives 40% 60%

Parliamentary Security Department 70% 30%

Parliamentary Procurement and Commercial Service 70% 30%

The House of Commons incurred expenditure of The British-Irish Parliamentary Assembly (BIPA) is £86,061,000 (2016–17: £79,896,000) on behalf of the provided with accounting services and accommodation. House of Lords during 2017–18. The balance as at 31 The House made payments of £133,000 on behalf of March 2018 relating to accommodation, works and the BIPA in 2017–18. At the year end, the balance due other shared services owed to the House of Commons from BIPA in respect of 2017–18 expenditure was £nil. by the House of Lords was £4,206,000 (in 2016–17: Accommodation is also provided to the British American £114,000). Parliamentary Group (who are also given accounting support at the year-end), Commonwealth Parliamentary The House of Lords incurred expenditure of £1,475,000 Association (UK Branch) and the British Group of the (2016–17: £1,481,000) on behalf of the House of Inter-Parliamentary Union. Commons during 2017–18. The balance as at 31 March 2018 owed to the House of Lords by the House of Commons was £125,000 (2016–17: £296,000). 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 2017–18

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17. Third-party assets House’s assets and are not included in the accounts. The House of Commons holds the following third party The assets held at the reporting period date to which it assets in a public bank account. These are not the was practical to ascribe monetary assets, such as bank balances were:

2017–18 2016–17

£000 £000 Gratuities and service charges 60 58

18. 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. I confirm there are none. Annual Report and Accounts 2017–18 Administration Estimate Audit and Risk Assurance Committee Annual Report 2017-18 120

04Administration Estimate Audit and Risk Assurance Committee Annual Report 2017-18 © UK Parliament/Mark Duffy

Annual Report and Accounts 2017–18 Administration Estimate Audit and Risk Assurance Committee Annual Report 2017-18 122 Administration Estimate Audit and Risk Assurance Committee Annual Report 2017-18

Introduction

1. This is the eighteenth annual report of the House of Commons Administration Estimate Audit and Risk Assurance Committee (AEARAC), which was established by the House of Commons Commission on 15 May 2000. 2. This report outlines the AEARAC’s conclusions in relation to the Administration Estimate for the financial year 2017–18. The Committee’s findings are set out by reference to the key areas on which it is required to provide assurance to the Accounting Officer under its terms of reference. 3. Details of the AEARAC’s terms of reference, membership and activity during the year are provided in the Appendix to this report. Administration Estimate Audit and Risk Assurance Committee Annual Report 2017-18

Conclusion for the financial year 2017–18

The effectiveness of the system of governance, risk management and internal control (the “system of internal control”)

Main Conclusion 4. The financial year 2017–2018 has been challenging 7. We note the Director of Internal Audit’s overall in many respects. The cyber attack in the week of opinion on the House’s framework of governance, 19 June 2017 tested the robustness of cyber security risk management and control for 2017–2018 as a systems. On 31 January and 6 February 2018 the Limited opinion. This means that the management, House of Commons and House of Lords respectively control and governance processes in place are agreed motions in identical terms concerning the generally adequate for the purposes of the restoration and renewal of the Palace of Westminster House of Commons but there are significant which already presents a series of risks to be weaknesses in their operation which impair their managed. Towards the end of the financial year, effectiveness, such that they could be, or could publicity concerning allegations of bullying and become, inadequate and ineffective. We concur harassment and a need to address these has resulted with this view. There has been a continued failure in reputational and other risks. In the meantime, over, now, seven years to improve the pace of further governance changes have been introduced, improvement despite recent valiant attempts on including the setting up of a new Commons the part of management to reverse this. Given Executive Board in order to improve decision making. the expected pace of change and the current and The Internal Audit function has undergone changes future challenges facing the Service and the House of personnel which have affected the content of of Commons, management may wish to reflect on the Internal Audit Plan for the financial year and, in whether the current state of affairs is acceptable particular, the limited number of audits completed and what further can be done, even allowing for before December 2017. the steps already taken to improve the effectiveness 5. It has been encouraging to note some areas of of the system of governance, risk management improvement, following concerns expressed by and internal control. In this respect, independent the Committee. For example, work to improve challenge, for example from Internal Audit and risk management has continued but still has some the Committee, will be of even more importance way to go before its benefits in relation to good as new governance arrangements are put in place management are understood and used to the full. in order to support the restoration and renewal Some administrative changes have strengthened programme and the Service grapples with the day to day compliance issues, such as the creation undoubted tests and demands which lie ahead. of a central log of policies and tracking and reporting of internal audit actions, a system for the registration of staff interests and the introduction of “The Essentials” action plan. The audit of Key Financial Controls received a substantial assurance rating, reflecting the strong nature of the control environment in this important area. 6. Notwithstanding some areas of improvement, overall progress has been inconsistent and disappointingly slow. Some areas of concern, identified in last year’s Report, still remain. These again reflect the ongoing need for an appropriate organisational culture. Annual Report and Accounts 2017–18 Administration Estimate Audit and Risk Assurance Committee Annual Report 2017-18 124

Supporting evidence The integrity of the Annual Accounts 8. Cyber security and security generally have continued 12. We have reviewed the Annual Accounts. to be a preoccupation of the Committee during 13. We consider the Accounts acceptable for signature the year, following the cyber attack in June 2017. by the Accounting Officer. We are satisfied with A subsequent review found that there had been the Annual Governance Statement and the process significant cyber security improvements but made undertaken to produce it. a number of recommendations for further actions, which are ongoing and will be monitored by the Committee. Generally, the Digital Service has The work of the internal audit service continued on its journey of change but there are 14. We note that Internal Audit largely completed its some key controls which remain to be implemented. amended audit plan during the period, meeting 9. Concerns about the statutory oversight of safety its target. We note that the relationship between requirements led the Committee to request an Internal Audit and Deloitte continues to work audit of all boards and groups which exercise well, with Deloitte, in general, providing specialist oversight functions, the so called second line of knowledge in specific areas rather than taking on assurance, during the financial year 2017–2018. entire audits. This concluded that there were significant variations 15. We also welcome the continued close cooperation between teams about the number and range of by Internal Audit with its colleagues in the House of bodies in place to provide senior management Lords. with assurance and that assurance was not being provided in all areas of assigned responsibility. In 16. Overall we are satisfied that the scope and nature relation to health and safety audit work found that of the work of Internal Audit, supported by its there were significant weaknesses in the safety partnership with Deloitte, and in parallel with management of construction and maintenance the work of the NAO as the external auditors, activities. Given the forthcoming substantial work adequately underpins the assessment of the to be undertaken in relation to the restoration and Accounting Officer of the system of internal control. renewal programme, the Committee will be paying close attention to progress in relation to this crucial The external audit by the external auditor area of activity in the future. A Review of Fire Safety 17. We are satisfied with the scope and nature of had previously highlighted a number of significant the work of the Comptroller and Auditor General ongoing risks which the Committee also continues (C&AG) and believe that the C&AG has carried out to monitor. its external audit work with due independence. 10. Third party management, through procurement and We are satisfied that the unadjusted misstatements contract management, continues to present critical reported therein do not require adjustment. These and continuing challenges. An audit of Contract errors, together with the recommendation contained Management Compliance and Procurement within the audit completion report do not highlight Benchmarking identified behavioural and other any substantive weaknesses in financial control. issues which management have sought to address 18. We have noted the contents of the letter of by a variety of means, such as a workshop and other representation, which is standard, including the initiatives. required disclosures on fraud and regularity. 11. Internal Audit work carried out by the House of 19. We are satisfied that the audit opinion was Lords reinforced concerns raised in previous years appropriate. about project and programme management. In particular, the audit of the Elizabeth Tower Capital Project revealed inadequacies in business case Other matters as were referred to the Committee development and project control in the early stages by either the Accounting Officer or the Commission of the project. These provided valuable lessons for 20. No other matters were referred to the Committee the proper and efficient conduct of future work on by the Accounting Officer or the Commission in the Estate. 2017–18. Administration Estimate Audit and Risk Annual Report and Accounts 2017–18 Assurance Committee Annual Report 2017-18 125

Appendix

Terms of reference

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

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

Membership The membership of the Committee shall be:

• 3 MP members, including: - A Member of the House of Commons Commission - A Member of the Finance Committee

• 3 external Members, appointed by the Commission

The Chairman shall be appointed by the Commission from amongst the external members of the Committee.

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

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

• The effectiveness of the system of governance, risk management and internal control (referred to collectively as the “system of internal control”)

• The integrity of the Annual Accounts

• The work of the internal audit service

• The external audit by the external auditor

• Other matters as may be referred to it by either the Accounting Officer or the Commission Annual Report and Accounts 2017–18 Administration Estimate Audit and Risk Assurance Committee Annual Report 2017-18 126

Responsibilities

Governance, Risk Management and Internal Control The Committee is responsible for reviewing governance, risk management and internal control (“the system of internal control”). This reviewing will include:

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

• The development and operation of the system of risk management, in accordance with the overall risk management policy

• The level and range of assurances on the management of risks

• The adequacy and implementation of proposed management actions to improve the effectiveness of internal controls

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

• any significant changes in the accounting policies or treatments

• major financial reporting judgements or estimates

• consistency of the Annual Governance Statement

• resolution of any matters raised by the external auditor

• significant adjustments resulting from the audit by the external auditor

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

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

• Agreement to the annual internal audit plan and monitoring of progress

• Consideration of the results and findings from internal audit work and the adequacy of management responses

• Consideration of the Director of Internal Audit’s annual report and opinion

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

• Recommendations on the appointment and scope of work of the external auditor

• Consideration of the external audit strategy

• The results of the external audit work, including any reports to those charged with responsibilities for governance, and the adequacy of management responses

• Representations made by management to the external auditor

• Annual review of the external auditor’s independence and effectiveness Administration Estimate Audit and Risk Annual Report and Accounts 2017–18 Assurance Committee Annual Report 2017-18 127

Membership Internal Audit 2. The Committee is chaired by an external member, Dame 8. The Committee routinely receives an oral report at Janet Gaymer DBE, who is also an external member of its meetings from the Head of Internal Audit and Risk the House of Commons Commission. Jane McCall and Management, together with a paper showing progress Robert Scruton are the other two external members of against the annual work programme, summaries of the the Committee. The MP members of the Committee main conclusions from completed audit assignments until December 2017 were Sir Paul Beresford MP, Tom and the balance between core audit and the other work Brake MP and Rt Hon Dame Rosie Winterton MP. undertaken by Internal Audit. Thereafter, Rt Hon Dame Rosie Winterton MP was 9. At the beginning of the financial year Richard succeeded by Mr Clive Betts MP. The Membership of Hill was the acting Head of Internal Audit. On 27 the Members Estimate Audit Committee (MEAC) is the November 2017 Dr Richard Stammers assumed same as that of the AEARAC. the role of Head of Internal Audit and Risk 3. The Clerk of the House, The Director General of management. the House of Commons, the Director of Finance, 10. All qualified staff maintained their continuing the Head of Internal Audit and officials from the professional development in the year. The Internal National Audit Office also attend the Committee’s Audit team updated their self-assessment against meetings. These officials may withdraw for specific their professional standards and confirmed that items at the Committee’s, or their own, request. a series of continuous improvements were being 4. The Committee’s Secretary is the Private Secretary addressed. to the Clerk of the House. The Committee is also 11.  Deloitte, as the Internal Audit external support, supported by a Committee Assistant. assisted in 2 audits during the year, as well as supporting the team with access to resources and Meetings information and some counter fraud work. Due 5. The Committee met formally six times in the financial to the specialist skills required, Deloitte supported year 2017–18: on 26 April, 3 and 5 July, and 1 audits in such areas as counter fraud, key IT controls November 2017, and 23 January and 21 March and key financial processes and controls. 2018. Attendance is shown in the table below. Internal audits considered by the Committee 12. During 2017–2018 the Committee was notified Total number of Member meetings attended of 20 audits relating to the Administration Estimate, including 11 audits from the 2017–2018 Dame Janet Gaymer DBE (Chair) 6/6 work programme. Two further audits from the Sir Paul Beresford MP 3/6 2017/2018 work programme were considered at the July 2018 meeting, both of which had already Mr Clive Betts MP 1/2 been reported at final draft stage. Audit reports are Tom Brake MP 6/6 usually considered first by the external members of the Committee, who may choose to bring matters Jane McCall 6/6 to the attention of the full Committee. Robert Scruton 6/6 13.  Audits discussed by the Committee dealt with a Dame Rosie Winterton MP 1/4 wide range of topics, covering: a. Core audit issues such as the internal control environment, health and safety, and key IT 6. In addition it held an informal joint seminar with the controls House of Lords Audit Committee to consider audit best practice on 20 March 2018. b. Corporate issues, such as risk management, lines of defence and compliance culture 7. The external members of the Committee held informal meetings with the House’s finance c. Core services provided by the House Service team and the NAO to discuss the draft House of d. The governance, progress and status of Commons Administration Estimate Annual Report significant investment projects and Accounts on 13 June 2018. Annual Report and Accounts 2017–18 Administration Estimate Audit and Risk Assurance Committee Annual Report 2017-18 128

The Committee also followed-up implementation 21. In November 2017 the Committee discussed the of agreed management actions. C&AG’s planned approach to auditing the House 14. Internal Audit also undertakes follow up reviews of Commons Annual Accounts 2017–2018. Other when an audit has been issued for six months than the risks required to be presumed under ISA and contains major findings and agreed actions. 240, the external auditors raised a significant risk of The Committee received a number of follow- the valuation of the Parliamentary Estate on the up audits including regular progress updates on balance sheet. the completion of audit actions from tracking 22. The external members of the Committee met with conducted by Internal Audit. staff of the C&AG and Finance staff on 13 June 15. Further information on specific audits is included in 2018 to discuss the draft House of Commons: the minutes of the Committee’s meetings which are Administration Estimate Accounts for 2017–2018. available on the Committee’s website. Following this the accounts were discussed by the full Committee on 4 July 2018 prior to being signed off by the Clerk of the House, as Accounting Officer. Risk Management 16. The Committee continued to fulfil its responsibility House of Lords Audit Committee to review the development and operation of the system of risk management, in accordance with the 23. The Committee held joint meetings with the House overall risk management policy, and the level and of Lords Audit Committee in October 2017 and range of assurances on the management of risks. March 2018. The main items considered were ongoing governance changes, programmes and 17. The Committee provides formal assurance to the projects, including the audit of the Elizabeth Tower Commission and the Accounting Officer that risks Refurbishment project, the Enterprise Portfolio are being effectively managed by the organisation Management Office, the Efficiencies Programme, and monitored by the Commons Executive the Parliamentary Procurement and Commercial Board (previously the Executive Committee.). The Service, the General Data Protection Regulation and Commons Executive Board (previously the Board) cyber security. The Committee also continues to has day to day responsibility for managing risk. share agendas and minutes with the House of Lords Audit Committee. Internal audit charter 18. The Internal Audit service works to the Public Sector Members Estimate Audit Committee Internal Audit Standards professional framework. The 24.  A Members Estimate Audit Committee was House’s internal audit charter, sets out the purpose, established by the House’s Members Estimate role, responsibility, status and authority of internal Committee on 14 June 2004. It has the same auditing within the House of Commons and outlining membership as the Administration Estimate Audit the scope of internal audit work. This charter was and Risk Assurance Committee (AEARAC) and meets revised in April 2016 and agreed by the Committee. at the same time as the AEARAC – each agenda item sets out whether the Committee is considering Planning of the audit programme it in its capacity as the AEARAC, the Members Estimate Audit Committee or both. The annual 19. The Committee agreed the Internal Audit report of the Members Estimate Audit Committee programme for 2017–2018 in April 2017. The will be published with the House of Commons: Committee agreed proposed changes to the Members Estimate Accounts 2017–2018. programme in January 2018.

Further information about the Committee External Auditors 25. The two Audit Committees publish annual reports and 20. The Comptroller and Auditor General (C&AG) has certain papers (agendas, minutes and actions arising) continued to provide an external audit function on their page on the parliamentary website www. for the House of Commons. C&AG staff routinely parliament.uk/business/committees/committees- attend meetings of the Committee and receive all a-z/other-committees/estimate-audit-committees. of its papers and minutes, although the Committee continues from time to time to discuss certain items of business without auditors present.