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Heritage Lottery Fund National Heritage Memorial Fund Lottery Heritage Lottery Fund National Heritage Memorial Fund Lottery Distribution Annual Report and Accounts for the year ended 31 March 2010 Heritage Lottery Fund National Heritage Memorial Fund Lottery Distribution Annual Report and Accounts for the year ended 31 March 2010 Report presented to Parliament pursuant to section 34(3) of the National Lottery etc. Act 1993 (as amended by the National Lottery Act 2006), and accounts presented to Parliament pursuant to section 35(5) of the National Lottery etc. Act 1993. Ordered by the House of Commons to be printed 14 July 2010 Laid before the Scottish Parliament by the Scottish Ministers 15 July 2010 Laid before the Northern Ireland Assembly 8 September 2010 HC 106 SG/2010/102 London: The Stationery Office £10.75 © National Heritage Memorial Fund copyright 2010 The text of this document (this excludes, where present, the Royal Arms and all departmental and agency logos) may be reproduced free of charge in any format or medium providing that it is reproduced accurately and not in a misleading context. The material must be acknowledged as National Heritage Memorial Fund copyright and the document title specified. Where third party material has been identified, permission from the respective copyright holder must be sought. ISBN: 9780102964547 Printed in the UK for The Stationery Office Limited on behalf of the Controller of Her Majesty’s Stationery Office ID 2353287 07/10 Printed on paper containing 75% recycled fibre content minimum. Contents Report of the Trustees and Accounting Officer 2 Management commentary 2 Financial review 7 Remuneration report 11 Statement of Trustees’ and Chief Executive’s responsibilities 14 Statement on internal control 15 The Certificate and Report of the Comptroller and Auditor General to the Houses of Parliament and Scottish Parliament 19 Net Expenditure Statement 21 Statement of Changes in Equity 22 Statement of Financial Position 23 Statement of Cash Flows 24 Reconciliation of Net Cash Flow to Movement in Net Funds 25 Notes to the Accounts 26 Policy Directions 41 Corporate Performance 48 Progress on projects over £5million 50 Grants awarded over £100,000 52 Employment monitoring 61 1 Heritage Lottery Fund Annual Report and Accounts 2009–10 Report of the Trustees and Accounting Officer Management commentary Under section 22 of the 1993 Act, the Background information Secretary of State for Culture, Olympics, The National Heritage Memorial Fund Media and Sport shall allocate 20% of the (NHMF or ‘the Fund’) is vested in and sum paid into the NLDF for expenditure on, administered by a body corporate known or connected with, the national heritage. as the Trustees of NHMF, consisting Section 23(3) establishes the Trustees of of a Chair and not more than 14 other NHMF as distributors of that portion. The members appointed by the Prime Minister. percentage allocation was subsequently The Fund was set up on 1 April 1980 by the reduced to 162⁄3% in October 1997 National Heritage Act 1980 (‘the 1980 Act’) following the government’s creation of the in succession to the National Land Fund as New Opportunities Fund (now the Big a memorial to those who have given their Lottery Fund). lives for the United Kingdom. The powers of the Trustees and their responsibilities were These accounts have been prepared in a extended by the provisions of the National form directed by the Secretary of State for Lottery etc. Act 1993 (‘the 1993 Act’), the Culture, Olympics, Media and Sport with National Heritage Act 1997 (‘the 1997 Act’) the consent of HM Treasury in accordance and the National Lottery Act 1998 (‘the with section 35(3) of the 1993 Act. 1998 Act’). Principal activities Under the 1993 Act, Trustees of NHMF Under sections 3 and 3a of the 1980 Act, became responsible for the distribution of Trustees of NHMF may make grants and that proportion of the National Lottery loans out of the Fund for the purpose of proceeds allocated to the heritage. Trustees acquiring, maintaining or preserving: of NHMF have to prepare separate accounts a)any land, building or structure which for the receipt and allocation of grant-in-aid in the opinion of the Trustees is of and for their operation as a distributor of outstanding scenic, historic, aesthetic, National Lottery funds. Trustees have archaeological, architectural or scientific chosen to refer to the funds as NHMF for interest; sums allocated under the provisions of the b)any object which in their opinion is of 1980 Act and the Heritage Lottery Fund outstanding historic, artistic or scientific (HLF) for the receipts under the provisions interest; of the 1993 Act. c) any collection or group of objects, being a collection or group which, taken as a Under section 21(1) of the 1993 Act a fund whole, is in their opinion of outstanding known as the National Lottery Distribution historic, artistic or scientific interest. Fund (NLDF) is maintained under the control and management of the Secretary Section 4 of the 1980 Act (as amended) of State for Culture, Olympics, Media and extends the powers of Trustees to improving Sport. All sums received from the licensee the display of items of outstanding interest of the National Lottery under section 5(6) to the national heritage by providing are paid to the Secretary of State and financial assistance to construct, convert or placed by him in the NLDF. Trustees of improve any building in order to provide NHMF apply to the NLDF for funds to facilities designed to promote the public’s meet grant payments and administration enjoyment or advance the public’s expenses. knowledge. 2 Heritage Lottery Fund Annual Report and Accounts 2009–10 Under the 1997 Act, Trustees are now also Financial Instruments able to assist projects directed to increasing International Financial Reporting Standard 7 public understanding and enjoyment of the ‘Financial Instruments: Disclosures’ (IFRS 7) heritage and to interpreting and recording requires disclosure of the role that financial important aspects of the nation’s history, instruments have had during the period in natural history and landscape. Following creating or changing the risks an entity faces consultation with potential applicants, in undertaking its activities. Financial advisers, and other bodies, further new instruments play a much more limited role in initiatives – dealing with revenue grants creating or changing risk for NHMF than is (to widen access in general to the heritage), typical of the listed companies to which as well as in the fields of archaeology, IFRS 7 mainly applies. NHMF does not have townscapes, information technology, and powers to borrow and can only invest education – were set up. The 1998 Act gave grant-in-aid derived funds. Financial assets Trustees the power to delegate Lottery grant and liabilities are generated by day-to-day decisions to staff and also to committees operational activities rather than being held containing some members who are not to change the risks facing the organisation. Trustees. Liquidity risk Aims In 2009–10, £203.3million (99%) of HLF’s income derived from the National Lottery. We have three core aims for HLF, which The remaining income derived from define in broad terms how we are trying to investment returns from the balance held improve quality of life through the with the NLDF, £2million (1%), along with heritage. The core aims are: a small amount of bank interest and sundry • conserve the UK’s diverse heritage income. The Trustees recognise that their for present and future generations to hard commitments (i.e. signed grant experience and enjoy; contracts) and their other payables • help more people, and a wider range of exceeded the value of funds in the NLDF people, to take an active part in and make at 31 March 2010. However, Trustees decisions about their heritage; consider that HLF is not exposed to • help people to learn about their own significant liquidity risks as they are and other people’s heritage. satisfied that they will have sufficient liquid resources within the NLDF and the bank to As an organisation we strive to achieve cover all likely grant payment requests in economy, efficiency and effectiveness in all the coming years. The Department for that we do. In addition clarity, prioritisation, Culture, Media and Sport (DCMS) has judgement, responsible authority and assured Trustees that they will continue accountability are core principles for us as an to receive a share of the National Lottery organisation. They inform our approach to until 2019. Trustees have set a long-term funding, and how we work with customers grant award strategy to ensure that HLF’s and colleagues. We aim to be recognisable liabilities are in line with their assets and wherever we work through consistent that they are able to meet their commitments practice and presentation while retaining to 2019. the flexibility to respond to differences and needs through our local teams across the UK. 3 Heritage Lottery Fund Annual Report and Accounts 2009–10 Report of the Trustees and Accounting Officer Market and Interest rate risk Foreign currency risk The financial assets of HLF are invested in HLF is not exposed to any foreign the NLDF, which invests in a narrow band exchange risks. of low-risk assets such as government Financial assets by category bonds and cash. The Trustees have no 2009–10 2008–09 control over the investment of these funds. £’000 £’000 At the date of the statement of financial Assets per the statement position the market value of our investments of financial position in the NLDF was £379million. Funds at the – non-current assets 2,168 1,369 NLDF earned on average 0.58% in the year. – investments available Cash balances, which are drawn down for sale 378,977 452,562 from the NLDF to pay grant commitments – cash and cash and operating costs, are held in instant- equivalents 3,604 4,105 – loans and receivables 1,232 3,290 access variable rate bank accounts, which 385,981 461,326 carried an interest rate of 0.35% in the year.
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