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HLF Annual Report and Accounts 2011–12

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HLF Annual Report and Accounts 2011–12 Heritage Lottery Fund National Heritage Memorial Fund Lottery Distribution Annual Report and Accounts for the year ended 31 March 2012 Heritage Lottery Fund National Heritage Memorial Fund Lottery Distribution Annual Report and Accounts for the year ended 31 March 2012 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 11 July 2012 Laid before the Scottish Parliament by the Scottish Ministers 12 July 2012 Laid before the Northern Ireland Assembly 5 September 2012 HC 294 SG/2012/110 London: The Stationery Office £14.75 © National Heritage Memorial Fund 2012 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: 9780102978186 Printed in the UK for The Stationery Office Limited on behalf of the Controller of Her Majesty’s Stationery Office. ID: 2492383 07/12 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 Governance statement 17 The Certificate and Report of the Comptroller and Auditor General to the Houses of Parliament and Scottish Parliament 24 Statement of Comprehensive Net Expenditure 26 Statement of Changes in Equity 27 Statement of Financial Position 28 Statement of Cash Flows 29 Reconciliation of Net Cash Flows to Movement in Net Funds 29 Notes to the Accounts 30 Policy Directions 47 Policy directions in Wales 54 Policy directions in relation to Scotland 56 Corporate Performance 58 Progress on Projects Over £5million 60 Grants Awarded Over £100,000 62 Employment Monitoring 76 1 Heritage Lottery Fund Annual Report and Accounts 2012 Report of the Trustees and Accounting Officer Management commentary or connected with, the national heritage. Background information Section 23(3) establishes the Trustees of The National Heritage Memorial Fund (NHMF NHMF as distributors of that portion. The or ‘the Fund’) is vested in and administered percentage allocation was reduced to 162⁄3% by a body corporate known as the Trustees in October 1997 following the government’s of NHMF, consisting of a Chair and not creation of the New Opportunities Fund, and more than 14 other members appointed by was increased to 18% in April 2011. the Prime Minister. The Fund was set up on 1 April 1980 by the National Heritage Act These accounts have been prepared in a 1980 (‘the 1980 Act’) in succession to the form directed by the Secretary of State for National Land Fund as a memorial to those Culture, Olympics, Media and Sport with who have given their lives for the United the consent of HM Treasury in accordance Kingdom. It receives an annual grant-in-aid with section 35(3) of the 1993 Act. from the government to allow it to make Principal activities grants. The powers of the Trustees and their Under sections 3 and 3a of the 1980 Act, responsibilities were extended by the Trustees of NHMF may make grants and provisions of the National Lottery etc. Act loans out of the Fund for the purpose of 1993 (‘the 1993 Act’), the National Heritage acquiring, maintaining or preserving: Act 1997 (‘the 1997 Act’) and the National Lottery Act 1998 (‘the 1998 Act’). a) any land, building or structure which in the opinion of the Trustees is of outstanding Under the 1993 Act, Trustees of NHMF scenic, historic, aesthetic, archaeological, became responsible for the distribution architectural or scientific interest; of that proportion of National Lottery proceeds allocated to the heritage. Trustees b) any object which in their opinion is of of NHMF have to prepare separate accounts outstanding historic, artistic or scientific for the receipt and allocation of grant-in-aid interest; and for their operation as a distributor of National Lottery money. Trustees have c) any collection or group of objects, being chosen to refer to the funds as NHMF for a collection or group which, taken as a sums allocated under the provisions of the whole, is in their opinion of outstanding 1980 Act and the Heritage Lottery Fund historic, artistic or scientific interest. (HLF) for receipts under the provisions of Section 4 of the 1980 Act (as amended) the 1993 Act. extends the powers of Trustees to improving Under section 21(1) of the 1993 Act a fund the display of items of outstanding interest known as the National Lottery Distribution to the national heritage by providing Fund (NLDF) is maintained under the financial assistance to construct, convert or control and management of the Secretary improve any building in order to provide of State for Culture, Olympics, Media and facilities designed to promote the public’s Sport. All sums received from the licensee enjoyment or advance the public’s knowledge. of the National Lottery under section 5(6) Under the 1997 Act, Trustees are now also are paid to the Secretary of State and placed able to assist projects directed to increasing by him in the NLDF. Trustees of NHMF public understanding and enjoyment of the apply to the NLDF for funds to meet grant heritage and to interpreting and recording payments and administration expenses. important aspects of the nation’s history, Under section 22 of the 1993 Act, the natural history and landscape. Following Secretary of State for Culture, Olympics, consultation with potential applicants, Media and Sport shall allocate 20% of the advisers and other bodies, further new sum paid into the NLDF for expenditure on, initiatives – dealing with revenue grants 2 Heritage Lottery Fund Annual Report and Accounts 2012 (to widen access in general to the heritage), are generated by day-to-day operational as well as in the fields of archaeology, activities rather than being held to change townscapes, information technology, and the risks facing the organisation. education – were set up. The 1998 Act gave Trustees the power to delegate Lottery grant Liquidity risk decisions to staff and also to committees In 2011–12, £258million (99%) of HLF’s net containing some members who are not income after deduction of our contribution Trustees. to the Olympic Lottery Distribution Fund derived from the National Lottery. The Aims remaining income derived from investment We have three core aims for HLF, which returns from the balance held with the define in broad terms how we are trying to NLDF, £2million (1%), along with a small improve quality of life through the heritage. amount of bank interest and sundry income. The core aims are: The Trustees recognise that their hard commitments (ie a grant contract is in place) • conserve the UK’s diverse heritage and their other payables exceeded the value for present and future generations to of funds in the NLDF at 31 March 2012. experience and enjoy; However, Trustees consider that HLF is not • help more people, and a wider range of exposed to significant liquidity risks as they people, to take an active part in and make are satisfied that they will have sufficient decisions about their heritage; liquid resources within the NLDF and the bank to cover all likely grant payment • help people to learn about their own requests in the coming years. Trustees have and other people’s heritage. been informed by the Department for Culture, Media and Sport (DCMS) that it has As an organisation we strive to achieve no plans to change the Lottery distribution economy, efficiency and effectiveness in all arrangements for the heritage sector. Indeed, that we do. In addition, clarity, prioritisation, DCMS has increased the heritage share judgement, responsible authority and distributed by HLF to 20% from April 2012. accountability are core principles for us. Trustees have set a long-term grant-award These inform our approach to funding, strategy to ensure that HLF’s liabilities are and how we work with customers and in line with assets, and that Trustees are colleagues. We aim to be recognisable able to meet their commitments to 2023, wherever we work through consistent when the fourth Lottery licence expires. practice and presentation while retaining Thus, even if there were a long-term decline the flexibility to respond to differences and in Lottery income, Trustees would be able needs through our local teams across the UK. to adjust annual grant budgets to compensate. Financial instruments Market and interest rate risk International Financial Reporting Standard 7 The financial assets of HLF are invested in ‘Financial Instruments: Disclosures’ (IFRS 7) the NLDF, which invests in a narrow band requires disclosure of the role that financial of low-risk assets such as government bonds instruments have had during the period in and cash. The Trustees have no control over creating or changing the risks an entity faces the investment of these funds. For these in undertaking its activities. Financial two reasons, HLF has not carried out instruments play a much more limited role in sensitivity analysis on market risks.
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