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Dep Con and Part Nso D Ac Tme Olida Cco Ent F Ated Unt for D Department for Education Consolidated annual report and accounts For the year ended 31 March 2016 58019_HC326_Cover / sig1 / plateA Page intentionally left blank. 58019_HC326_Cover / sig1 / plateB Department for Education Consolidated annual report and accounts For the year ended 31 March 2016 Presented to House of Commons pursuant to Section 6(4) of the Government Resources and Accounts Act 2000 Ordered to be printed by the House of Commons on 20 December 2016 HC 326 © Crown copyright 2016 You may re-use this information (excluding logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit http://www.nationalarchives.gov.uk/doc/open- government-licence/ or e-mail: [email protected]. Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. Any enquiries regarding this publication should be sent to us at Department for Education, Sanctuary Buildings, Great Smith Street, London. SW1P 3BT This document is also available from our website at www.gov.uk/government/publications Print ISBN: 9781474139458 Web ISBN: 9781474139465 Printed on paper containing 75% recycled fibre content minimum Printed in the UK by the Williams Lea Group on behalf of the Controller of Her Majesty’s Stationery Office ID P002850597 12/16 Contents Performance report 7 1. Overview 7 2. Perfoformance analysis 15 Accountability 21 3. Corporate governance report 21 4. Remuneration and staff report 40 5. Parliamentary accountability and audit report 61 Financial Statements 89 Consolidated Statement of Comprehensive Net Expenditure 89 Consolidated Statement of Financial Position 90 Consolidated Statement of Cash Flows 91 Consolidated Statement of Changes in Taxpayers’ Equity 93 Department & Agencies Statement of Changes in Taxpayers’ Equity 94 Notes to the Accounts 95 Annexes 154 Annex A – Departmental statistics 154 Annex B – Environmental, social and community issues 160 Annex C – Data tables 169 Annex D – Consolidation approach & methodology 175 Glossary of key terms 187 5 6 Performance report 1. Overview 1.1 The Department had three key objectives in the 2015-16 financial year: • Safety and wellbeing • Educational excellence everywhere • Prepared for adult life 1.2 The Department acted decisively to start delivering the government’s manifesto commitments to create 500 free schools, provide 30 hours of free childcare for working parents of 3 and 4 year olds, and much more besides, as set out in this annual report. 1.3 Since the year end Rt Hon Justine Greening MP has been appointed as Secretary of State for Education and Minister for Women and Equalities, on 14 July 2016. At the same time the Department gained additional responsibilities for further and higher education, from the Department for Business Innovation and Skills. The Department is actively taking forward this new agenda, and the Secretary of State’s new priorities, and will report on them fully in the 2016-17 accounts, to be published next summer. Organisation 1.4 The corporate centre of the Department was strengthened over the year under director general leadership. This allowed us to pursue greater efficiency and effectiveness in our finance, commercial, IT, HR, analytical and change functions. 1.5 The Department continued to improve the management of strategic risk in the Department. The Audit and Risk Committee scrutinised near misses and the biggest organisational risks facing the education and children’s services sectors. 1.6 As my predecessor set out in the 2014-15 Annual Report and Accounts, we will be implementing a new approach in the production of our 2016-17 accounts. The accounts of academies will not be consolidated into the core department, and there will instead be a separate Sector Annual Report and Accounts. We have developed this method of financial reporting on consultation with Parliament, HMT and NAO. 7 1.7 I would like to thank everyone in the Department for their hard work and dedication throughout the year in delivering the Department’s objectives. Jonathan Slater 9 December 2016 Permanent Secretary 8 Non-executive board member’s report 1.8 In 2015-16, the Department continued to deliver an ambitious programme of reforms, and laid the foundation for organisational changes to meet the challenge of its increasing focus on delivery. The departmental board 1.9 The Department’s board met four times in 2015-16. It discussed a wide range of issues, including: strategic priorities; organisational change; the management of risk; and progress of delivery programmes. 1.10 Outside board meetings, non-executive board members provided challenge and support on a wide range of issues, including commercial matters, the performance of executive agencies and IT. The non-executive team met regularly. Membership 1.11 There were changes to board membership in 2015-16. Caroline Dinenage MP joined the board following the 2015 general election. Richard Calvert was appointed Director General for Strategy and Resources in September 2015. 1.12 On the non-executive team, Ruby McGregor-Smith transferred from the Department for Culture, Media and Sport board in December 2015, following the move of the Government Equalities Office to the Department for Education. I joined, and took over as chair of the Audit and Risk Committee, in January 2016. 1.13 Since the end of the financial year, the Department has welcomed Jonathan Slater as our new Permanent Secretary. In July, we welcomed a new Secretary of State and two new ministers: Jo Johnson MP and The Rt Hon Robert Halfon MP. Sir Paul Marshall stepped down as lead non-executive, following the completion of his three- year term; the process of identifying his successor is underway. Committees 1.14 The Performance Committee, which includes both officials and non-executives, met monthly. The committee oversaw the development of data-driven planning across the department’s main delivery priorities. It also reviewed the systemic risks that could affect delivery of the department’s priorities, and actions in hand to reduce the likelihood they materialised. 1.15 The Audit and Risk Committee met five times in 2015-16. The committee provided advice on the complex accounting issues arising from the consolidation of academy accounts, and reviewed plans for the introduction of a new reporting framework from 2016-17. It also regularly reviewed risks, issues and near misses. 1.16 Ruby McGregor-Smith led a review of board effectiveness. This showed that overall the board and its committees were felt to be operating effectively. In response to the evaluation, the board is adopting a more structured approach to planning its agenda. 9 The Performance Committee has increased its focus on problem-solving focused support and challenge for SROs. Looking ahead 1.17 The Department has seen significant change since the end of the financial year, assuming responsibility for higher and further education policy, apprenticeships and skills from the former Department for Business, Innovation and Skills, as part of the machinery of government changes of July 2016. 1.18 There is no doubt that, in total, these changes plus the Department’s own prior plans, create a challenging agenda which will stretch the organisation and its resources. 1.19 The work completed since summer 2016 on the Department’s transformation programme places the organisation in a strong position to make the most of the opportunity presented by bringing all skills and education policy together in a single place. The non-executive team will continue to provide advice and scrutiny to help the Department achieve its strategic objectives. Ian S Ferguson 9 December 2016 Non-executive board member, chair of Audit and Risk Committee 10 Statement of performance and activities Strategic aims 1.20 During 2015-16 the Departmental Group work was focused on the delivery of three system goals, and was summarised in twelve delivery priorities1. 1.21 Since the year end Rt Hon Justine Greening MP has been appointed as Secretary of State for Education and Minister for Women and Equalities, on 14 July 2016. At the same time the department gained additional responsibilities for further and higher education, from the Department for Business Innovation and Skills. The Department is actively taking forward this new agenda, and the Secretary of State’s new priorities, and will report on them fully in the 2016-17 accounts, to be published next summer. Responsibilities 1.22 The Department is responsible for: • teaching and learning for children in the early years and in primary schools; • teaching and learning for young people under the age of 19 years, in secondary schools and in further education; • supporting professionals who work with children and young people; • helping disadvantaged children and young people to achieve more; and • making sure that local authority children services protect and support children. Our priorities 1.23 The Departmental Group’s system goals for the 2015-16 financial year were as follows: • Safety and wellbeing: all children and young people are protected from harm and vulnerable children are supported to succeed with opportunities as good as those for any other child. • Educational excellence everywhere: every child and young person can access high-quality provision, achieving to the best of his or her ability regardless of location, attainment and background. • Prepared for adult life: all 19-year-olds complete school or college with the skills and character to contribute to the UK’s society and economy and are able to access high-quality work or study options. 1.24 Performance against these strategic priorities is assessed in section 2. 1 The Department’s priorities are available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/508422/DfE_Strategy_overvie w.pdf 11 Key issues and risks facing the Group 1.25 We have included an assessment of the Department’s risk management framework within our Governance Statement (paragraph 3.65).
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