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Department of Health Annual Reports and Accounts HC 1011 Department of Health Annual Report and Accounts 2010-11 (For the period ended 31 March 2011) Accounts presented to the House of Commons pursuant to Section 6(4) of the Government Resources and Accounts Act 2000. Annual Report presented to the House of Commons by Command of Her Majesty Annual Report and Accounts presented to the House of Lords by Command of Her Majesty Ordered by the House of Commons to be printed on 5 September 2011 HC 1011 LONDON: The Stationery Office Price: £23.50 This is part of a series of departmental reports which, along with the Main Estimates 2010-11, the document Public Expenditure: Statistical Analyses 2010, and the Supply Estimates 2010-11: Supplementary Budgetary Information, present the Government’s outturn and planned expenditure for 2010-11. Crown Copyright 2011 You may re-use this information (excluding logos) free of charge in any format or medium, under terms of the Open Government Licence. To view this licence, visit: http://www.nationalarchives.gov.uk/doc/open-government-licence/ or email: [email protected]. Where we have identified any third party copyright material you will need to obtain permission from the copyright holders concerned. Any enquiries regarding this publication should be sent to Customer Service Centre using the Web contact form provided at: http://www.dh.gov.uk/en/ContactUs/DH_066319#_3 This publication is available for download at www.official-documents.gov.uk and is also available on our website at http://www.dh.gov.uk/en/Publicationsandstatistics/index.htm ISBN: 9780102967678 Printed in the UK by The Stationery Office Limited on behalf of the Controller of Her Majesty’s Stationery Office ID P002376260 07/10 Printed on paper containing 75% recycled fibre content minimum. Department of Health Resource Accounts 2010-11 Contents ANNUAL REPORT ..........................................................................................................2 STATEMENT OF PRINCIPAL ACCOUNTING OFFICER'S RESPONSIBILITIES.........43 REMUNERATION REPORT..........................................................................................44 RELATIONSHIP BETWEEN ACCOUNTING OFFICERS IN THE DEPARTMENT OF HEALTH, ITS AGENCIES AND THE NHS ....................................................................54 STATEMENT ON INTERNAL CONTROL .....................................................................55 THE CERTIFICATE OF THE COMPTROLLER AND AUDITOR GENERAL TO THE HOUSE OF COMMONS................................................................................................62 ACCOUNTING SCHEDULES Statement of Parliamentary Supply ...............................................................................64 Consolidated Statement of Comprehensive Net Expenditure........................................65 Consolidated Statement of Financial Position ...............................................................66 Consolidated Statement of Cash Flows 67 Statement of Changes in Taxpayer’s Equity..................................................................68 NOTES TO THE DEPARTMENTAL RESOURCE ACCOUNTS....................................69 Annex A .......................................................................................................................135 Annex B .......................................................................................................................137 Annex C.......................................................................................................................140 1 Department of Health Resource Accounts 2010-11 ANNUAL REPORT AND MANAGEMENT COMMENTARY ANNUAL REPORT AND MANAGEMENT COMMENTARY 1 INTRODUCTION 1.1 The Department’s Resource Account is published each year by HM Treasury, and is an essential part of the Department’s accountability to both Parliament and the public for financial performance and the use of resources. These accounts also provide details of the high-level management and governance of the Department, and summarise performance, policy and financial achievements for the year just ended. 1.2 The other key elements of financial accountability published during the year are as follows: Parliamentary Estimates – The Estimates are the Government’s requests for resources from Parliament and are presented annually in the following cycle: Main Supply Estimates start the supply procedure and are presented at the beginning of the financial year to which they relate; Winter Supplementary Estimates are presented in November, and reflect changes to the Supply, and the funds that are required by the Department, that have been identified during the year; and Spring Supplementary Estimates are presented in February, and represent the final changes to Supply and funding required by the Department in year. Supply Estimates are presented to Parliament by HM Treasury and can be found on their website: www.hm-treasury.gov.uk. Public Expenditure Outturn White Paper – This is published by HM Treasury in July. For each Department, this shows provisional expenditure against the Departmental Expenditure Limits and the Administration Cost Limit, which covers the Department’s running costs. This is used to determine the level of underspend that may be available to be carried forward for spending in the current or future years, subject to agreement with HM Treasury. The White Paper can be found on the HM Treasury website: www.hm-treasury.gov.uk. 1.3 These Resource Accounts relate to the financial year 1 April 2010 to 31 March 2011. They have been prepared in accordance with a direction issued by HM Treasury under section 7 of the Government Resources and Accounts Act 2000. A copy of this direction is available online, by accessing the HM Treasury website at www.hm-treasury.gov.uk. 1.4 The Department’s financial statements consolidate the financial information of organisations within the Department’s Resource Accounting Boundary. As such, this consolidation includes the Department itself, those Special Health Authorities that are not funded by trading activities, Strategic Health Authorities, and Primary Care Trusts. The relationship between organisations within this boundary is substantially different from the concept of a group in the commercial sector, as it is based on in-year budgetary controls, rather than strategic controls or profit motive. In general terms, the primary focus of the Government-funded organisations within the Resource Accounting boundary lies with the commissioning of healthcare from the provider sector. 1.5 A wide range of organisations lie outside the Department’s Resource Accounting boundary, but remain within the much broader parameters of the Departmental Budgeting boundary. The latter is significantly different from the Department’s Resource Accounting Boundary, in that it also includes the Special Health Authorities that receive their funding directly from trading activities, Non-Departmental Public Bodies, NHS Trusts and NHS Foundation Trusts. By far the majority of this group of organisations operate as providers of healthcare, and work within what may be described as a trading environment with commissioners. 1.6 The primary statements and related disclosures show the total financial effects of all the activities in the year for all bodies within the Resource Accounting Boundary. The Comptroller and Auditor General audits these financial statements, and gives an opinion as to whether they provide a true and fair view. His opinion is provided with these accounts. 1.7 The rules for completing the accounts in each financial year are provided in HM Treasury’s Government Financial Reporting Manual (FReM) which is available at www.financial- 2 Department of Health Resource Accounts 2010-11 ANNUAL REPORT AND MANAGEMENT COMMENTARY reporting.gov.uk. The Manual is given the force of law by an accounts direction, issued by HM Treasury under section 5(2) of the Government Resources and Accounts Act 2000. 1.8 The FReM reflects the rules in professional accounting standards to the extent that they are appropriate to both the public sector and Government accounting requirements. From 2009-10, HM Treasury has required Government Departments to prepare their annual accounts on the basis of International Financial Reporting Standards (IFRS). A number of older international standards, many of which remain in use, are described as International Accounting Standards (IAS). However, other than where referring to a specific standard, these terms can be used interchangeably. 1.9 The financial statements consist of five primary statements (which provide summary information) and accompanying notes. The five primary statements are: Statement of Parliamentary Supply. This is the prime Parliamentary accountability statement. It provides a comparison of outturn against the Supply Estimate voted by Parliament for each Request for Resources (RfR); a summary of the cash required to finance expenditure; and a summary of income both appropriated-in-aid of expenditure and surrendered to the Consolidated Fund. Consolidated Statement of Comprehensive Net Expenditure (CSCNE) (formerly the Operating Cost Statement). This shows net resources (administration costs, programme costs and income) consumed by organisations within the Resource Accounting Boundary during the year, analysed by Request for Resources. Consolidated Statement of Financial Position (formerly the Balance Sheet). This shows the current and non-current assets, liabilities and taxpayers’ equity of organisations within the Resource Accounting Boundary
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