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Heritage Lottery Fund National Heritage Memorial Fund Lottery Distribution Annual Report and Accounts for the Year Ended 31 March 2011

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Heritage Lottery Fund National Heritage Memorial Fund Lottery Distribution Annual Report and Accounts for the Year Ended 31 March 2011 Heritage Lottery Fund National Heritage Memorial Fund Lottery Distribution Annual Report and Accounts for the year ended 31 March 2011 Heritage Lottery Fund National Heritage Memorial Fund Lottery Distribution Annual Report and Accounts for the year ended 31 March 2011 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 13 July 2011 Laid before the Scottish Parliament by the Scottish Ministers 14 July 2011 Laid before the Northern Ireland Assembly 7 September 2011 HC 1254 SG/2011/122 London: The Stationery Office £11.25 © National Heritage Memorial Fund copyright 2011 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. Any enquiries regarding this publication should be sent to us at National Heritage Memorial Fund, 7 Holbein Place, London SW1W 8NR. This publication is available for download at www.official-documents.gov.uk This document is also available from our website at www.hlf.org.uk ISBN: 9780102972047 Printed in the UK for The Stationery Office Limited on behalf of the Controller of Her Majesty’s Stationery Office. ID: 2431134 07/11 Printed on paper containing 75% recycled fibre content minimum. Contents Report of the Trustees and Accounting Officer 2 Management commentary 2 Financial review 9 Remuneration report 13 Statement of Trustees’ and Chief Executive’s responsibilities 16 Statement on internal control 17 The Certificate and Report of the Comptroller and Auditor General to the Houses of Parliament and Scottish Parliament 21 Statement of Comprehensive Net Expenditure 23 Statement of Changes in Equity 24 Statement of Financial Position 25 Statement of Cash Flows 26 Reconciliation of Net Cash Flows to Movement in Net Funds 26 Notes to the Accounts 27 Policy Directions 42 Corporate Performance 50 Progress on Projects Over £5million 52 Grants Awarded Over £100,000 54 Employment Monitoring 65 1 Heritage Lottery Fund Annual Report and Accounts 2011 Report of the Trustees and Accounting Officer Management commentary NHMF as distributors of that portion. The Background information percentage allocation was reduced to 162⁄3% The National Heritage Memorial Fund (NHMF in October 1997 following the government’s or ‘the Fund’) is vested in and administered creation of the New Opportunities Fund. by a body corporate known as the Trustees of NHMF, consisting of a Chair and not These accounts have been prepared in a more than 14 other members appointed by form directed by the Secretary of State for the Prime Minister. The Fund was set up on Culture, Olympics, Media and Sport with 1 April 1980 by the National Heritage Act the consent of HM Treasury in accordance 1980 (‘the 1980 Act’) in succession to the with section 35(3) of the 1993 Act. National Land Fund as a memorial to those Principal activities who have given their lives for the United Under sections 3 and 3a of the 1980 Act, Kingdom. The powers of the Trustees and Trustees of NHMF may make grants and their responsibilities were extended by the loans out of the Fund for the purpose of provisions of the National Lottery etc. Act acquiring, maintaining or preserving: 1993 (‘the 1993 Act’), the National Heritage Act 1997 (‘the 1997 Act’) and the National a) any land, building or structure which in the Lottery Act 1998 (‘the 1998 Act’). opinion of the Trustees is of outstanding scenic, historic, aesthetic, archaeological, Under the 1993 Act, Trustees of NHMF architectural or scientific interest; became responsible for the distribution of that proportion of National Lottery b)any object which in their opinion is of proceeds allocated to the heritage. Trustees outstanding historic, artistic or scientific of NHMF have to prepare separate accounts interest; for the receipt and allocation of grant-in-aid and for their operation as a distributor c) any collection or group of objects, being of National Lottery money. Trustees have a collection or group which, taken as a chosen to refer to the funds as NHMF for whole, is in their opinion of outstanding sums allocated under the provisions of the historic, artistic or scientific interest. 1980 Act and the Heritage Lottery Fund Section 4 of the 1980 Act (as amended) (HLF) for receipts under the provisions of extends the powers of Trustees to improving the 1993 Act. the display of items of outstanding interest Under section 21(1) of the 1993 Act a fund to the national heritage by providing known as the National Lottery Distribution financial assistance to construct, convert or Fund (NLDF) is maintained under the improve any building in order to provide control and management of the Secretary facilities designed to promote the public’s of State for Culture, Olympics, Media and enjoyment or advance the public’s knowledge. Sport. All sums received from the licensee Under the 1997 Act, Trustees are now also of the National Lottery under section 5(6) able to assist projects directed to increasing are paid to the Secretary of State and placed public understanding and enjoyment of the by him in the NLDF. Trustees of NHMF heritage and to interpreting and recording apply to the NLDF for funds to meet grant important aspects of the nation’s history, payments and administration expenses. natural history and landscape. Following Under section 22 of the 1993 Act, the consultation with potential applicants, Secretary of State for Culture, Olympics, advisers and other bodies, further new Media and Sport shall allocate 20% of the initiatives – dealing with revenue grants sum paid into the NLDF for expenditure on, (to widen access in general to the heritage), or connected with, the national heritage. as well as in the fields of archaeology, Section 23(3) establishes the Trustees of townscapes, information technology, and 2 Heritage Lottery Fund Annual Report and Accounts 2011 education – were set up. The 1998 Act gave Liquidity risk Trustees the power to delegate Lottery grant In 2010–11, £214million (96%) of HLF’s decisions to staff and also to committees income derived from the National Lottery. containing some members who are not The remaining income derived from Trustees. investment returns from the balance held with the NLDF, £3million (1%), along with Aims a small amount of bank interest and sundry We have three core aims for HLF, which income (3%). The Trustees recognise that define in broad terms how we are trying to their hard commitments (ie signed grant improve quality of life through the heritage. contracts) and their other payables The core aims are: exceeded the value of funds in the NLDF at • conserve the UK’s diverse heritage 31 March 2011. However, Trustees consider for present and future generations to that HLF is not exposed to significant experience and enjoy; liquidity risks as they are satisfied that they will have sufficient liquid resources within • help more people, and a wider range of the NLDF and the bank to cover all likely people, to take an active part in and make grant payment requests in the coming decisions about their heritage; years. Trustees have been informed by the Department for Culture, Media and Sport • help people to learn about their own (DCMS) that it has no plans to change the and other people’s heritage. Lottery distribution arrangements for the heritage sector. Indeed, DCMS is increasing As an organisation we strive to achieve the heritage share distributed by HLF to economy, efficiency and effectiveness in all 20% from April 2012. Trustees have set a that we do. In addition, clarity, prioritisation, long-term grant-award strategy to ensure judgement, responsible authority and that HLF’s liabilities are in line with assets, accountability are core principles for us. and that Trustees are able to meet their These inform our approach to funding, commitments to 2019, when the fourth and how we work with customers and Lottery licence expires. Thus, even if there colleagues. We aim to be recognisable were a long-term decline in Lottery income, wherever we work through consistent Trustees would be able to adjust annual practice and presentation while retaining grant budgets to compensate. the flexibility to respond to differences and needs through our local teams across the UK. Market and interest rate risk The financial assets of HLF are invested in Financial instruments the NLDF, which invests in a narrow band International Financial Reporting Standard 7 of low-risk assets such as government bonds ‘Financial Instruments: Disclosures’ (‘IFRS 7’) and cash. The Trustees have no control over requires disclosure of the role that financial the investment of these funds. For these instruments have had during the period in two reasons, HLF has not carried out creating or changing the risks an entity faces sensitivity analysis on market risks. At the in undertaking its activities. Financial date of the Statement of Financial Position, instruments play a much more limited role in the market value of our investments in the creating or changing risk for NHMF than is NLDF was £367million. Funds at the NLDF typical of the listed companies to which IFRS 7 earned on average 1.13% in the year. Cash mainly applies. NHMF does not have powers balances, which are drawn down from the to borrow and can only invest grant-in-aid- NLDF to pay grant commitments and derived funds.
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