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NORTHWEST DEVELOPMENT AGENCY ANNUAL REPORT AND FINANCIAL STATEMENTS

1ST APRIL 2003 TO 31sT MARCH 2004 CONTENTS

Pag茅

KEYACHIEVEMENTS 2003/04

REVIEW OF THE YEAR BY STEVEN BROOMHEAD, CHIEF EXECUTIVE

SUMMARY OF PERFORMANCE AND EXPENDITURE

NORTHWEST ECONOMY 2003/04

FOREWORD BY BRYAN GRAY, CHAIRMAN

PARTNERSHIP WORKING

NWDA GOVERNANCE

APPENDICES ENVIRONMENTAL POLICY

FINANCIAL STATEMENTS 15 Q' ",', ','. ~~,' o

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The Northwest Development Agency ~ The Northwest Development Agency is a Non-Departmental Public Body (NDPB) sponsored by the

Department of Trade and Industry. It was established under the Regional Development Agencies Act 1998 with a statutory remit to further the sustainable economic development and regeneration of the Northwest region through the promotion of business competitiveness, efficiency, investment, employment and skills development. The Agency's role is twofold:

路 To co-ordinate the delivery of the Regional Economic Strategy (RES), in conjunction with the North West Regional Assembly and Government Office for the North West.

resources to address RES priorities, lever in external resources and provide fundingsupport to partners in pursuit of RES objectives.

路 To use Agency

2 CHAIRMAN'S FOREWORD

Now in its fifth year the Northwest Development Agency is a well - established regional organisation, which throughout the year has concentrated its leadership and resources on driving forward sustainable economic regeneration in a region that is clearly prospering. During the year we helped to:

· Create or safeguard almost 13,000 jobs, · Create or attract over 700 new businesses, · Reclaim and remediate over 300 hectares of brownfield land, · Create over 19,000 learning opportunities; and · Secure £126m of private sector investment. At the beginning of the year we published a revised Regional Economic Strategy (RES) which has five

priorities: Business Development, Regeneration, Skills and Employment, Infrastructure and Image. The RES is supported by a detailed Action Plan which sets out a series of short-term activities required to deliver RES objectives and clearly identifies partner responsibilities. The Action Plan has provided a firm basis for RES implementation by all partners in the region and early achievements during 2003/04 include: . · Establishment of the NW Energy Council and launch of NW Energy Strategy,

· The continuing work by the North West Science Council to expand the region's science base. · ~Launch oftheNW-TourismcStrategy~and establishment-cor-the~NörthWesrTourisrn Forüiif ariâ~5csub~ regional Tourist Boards. · Launch of the Allance for Skils and Productivity. · Launch of the Regional Manufacturing Strategy.

· An extensive range of regeneration projects being taken forward by the three Urban Regeneration -----eompanies:-tiverp1Ii-lìslon, New EasfMancnester and-Westlakes Renaissance,

· The Cumbria Rural Regeneration Company (RRC) and Rural Regeneration Partnerships in Cheshire and Lancashire now fully operationaL. In its first year Cumbria RRC approved over 40 projects totaling £12m, ranging from initiatives to broaden the sub region's tourism offer to improving the rate of business start-ups;

and

· Core Cities Prospectuses launched for both Liverpool and Manchester and the development of CIOSCe-' '. d

collaboration between the two cities, ' _ . E

I would like to take this opportunity to thank all the partners across. the region who are implementing the RE~. .,_.'..~. , . ~.'

with such energy and enthusi~sm, Early indications are that .the RE~ is, delivering results, Ov~rall econom ..~ 3

perfrmance compares well woh the country as a whole and is outstnpping many other UK regions. The gk" - '; ¿.~

between the regional and national employment rates is narrowing. Business .confidence is high. We hav E much to celebrate, but we must not be complacent. We face many challenges if we are to build a tru _' ~

successful economy.

I would therefore like to highlight some issues that I consider to be particularly important for the future.

The NWDA Board recently approved a three-year Strategic Investment Plan (2004-2007), which commits £1.4bn to the region's economic regeneration. We have been successful in generating a large number of high to support the very best projects which help deliver the RES, provide excellent value for money and lever in other resources.

quality investment projects with our partners and this Plan ensures that the Agency is able

The Agency is also helping to improve the perceptions of England's Northwest, supporting national and international events taking place within the region and. positioning the Northwest as the best tourism destination

in Britain, We are providing strong support for Liverpool's European Capital of Culture (2008) programme, the economic benefits of which will be felt across the Northwest and beyond.

In February 2004 the Deputy Prime Minister announced plans for The Northern Way, as part of his review of the first year of the Sustainable Communities Plan, This is a very high profile initiative in which the NWDA, together with the other two northern RDAs (Yorkshire Forward and ONE NorthEast), is engaging key regional partners in the development of a long term vision (The Northern Way Growth Strategy) to fully exploit the economic growth potential of the corridor stretching from Liverpool to Hull and Newcastle. A great deal of work has already been done to deliver firm proposals to make the vision a reality and a report will be presented to John Prescott in the summer 012004,

Finally, the Agency celebrated its fifth birthday in April 2004, This notable event coincided with my becoming the "Chair of Chairs" for England's nine RDAs and it is a privilege to perform this important role at a time when RDAs are recognised as being central to the delivery of Government economic policy, RDAs are now key partners of Government and are increasingly ensuring that regional needs and priorities are at the heart of

Government decision making. Our task in the Northwest is to ensure that we take full advantage of this important relationship and continue to take the action necessary to fulfill our economic potentiaL.

Bryan M Gray, Chairman

NORTH WEST ECONOMY 2003/04

Overview During 2003/04 global economic conditions improved sharply, led by the USA and China, though growth in the in 2003, underpinned by

Eurozone remained dulL. In the UK, Gross Domestic Product (GDP) rose by 2,2%

consumer and government spending, and a strong recovery in investment. UK competitiveness was assisted by sterling depreciation in the first half of 2003, partially reversed since then.

Regional Accounts (April 2004) show Northwest growth outperforming the UK in 2002, with Gross Value Added

(GVA) per head in the region rising from 89,7% of the UK average in 2001 to 90,1 %, The Regional Economic Forecasting Panel expects the Northwest economy to continue to grow faster than the UK in 2003.

Information on Northwest sub regions relates to 2001, and shows wide disparities in both the level and growth of GVA. GVA per head ranges from 9% above the UK average in Cheshire to 28% below it in Merseyside, but growth in the Liverpool economy outpaced the UK average. Very slow growth in Cumbria in 1995-2001 cut

GVA per head to 77% of the UK average, Over the same period the economy of Greater Manchester expanded by 37%, in line with the UK average, The award of the 'European Capital of Culture 2008' to Liverpool represents a significant opportunity to boost the Merseyside economy and deliver benefits similar to those enjoyed in Manchester from the Commonwealth Games,

Output and Orders The latest business surveys for the Northwest point to rising sales and orders in both home and export markets, Business expansion in the Northwest in the first four months of 2004 was stronger than in the UK as a whole, . ----i:he-ealanee-eetween-services-and-manufacturing-is-improving-as-strong-growtiitlie service sector ----

moderates and manufacturing recovers from a long recession,

Investment and Employment Survey evidence points to a recovery in investment intentions in both manufacturing and services, with," u.

increased emphasis on product and process innovation, Labour markets continued to tighten during the yeaO? ", E

Between the final quarters of 2002/3 and 2003/4 the employment rate rose 0,5% to 73,9%, an employment g8i Ô of 3~,00,O to 3,13 mil~on, Growth in public and private service sector employment more than offset continue~,' :, ~, erosion in manufacturing employment. Unemployment has fallen from 5% to 4,6%, ~'" ::

Confidence, Costs, Prices and Cashflow · ~'~'''~.;; ~

Manufacturing businesses in the Northwest were extremely pessimistic about the business situation in the fir~ f

half of 2003, but that sentiment turned sharply in the autumn, Business confidence in the Northwest is now at

its highest levels since 1997 for both manufacturing and services, though competitive pressures and tight

margins constrain optimism on profiability, Nevertheless a record number of manufacturers expect improvement in profitability in the coming year - a third on balance, the highest percentage since the summer of 1997, Service sector companies are even more optimistic than those in manufacturing, though confidence has eased slightly since early 2004,

There was a marked rise in costs across both the North West manufacturing and service economies, with the sharper rate of increase for manufacturing due to rising raw material costs (especially oil and steel), The impact of heightened cost pressures was partly passed on to consumers in the form of higher charges, but there was also intensifying pressure on profit margins from rising unit costs and falling domestic and export prices, Higher

interest rates also gave cause for concern Public Opinion Research carried out by MORI in October 2003 on the Agency's behalf revealed that:

~ Over the last two years, twice as many businesses based outside the region say the Northwest has improved as a place to do business;

~ Half of the UK opinion leaders believe that the region is a better place to do business than other parts of the country,

~ 73% of the region's businesses expect the Northwest to become even more attractive to businesses over the next 5 years; and ~ There has been a 56% rise in the number of British residents who associate the region with success.

Sources: Regional Accounts, ONS, April 2004; Sub Regional Accounts, ONS, October 2003; Business Forecasts Northwest, Spring 2004;

Northwest Chambers of Commerce Quarterly Economic Survey, April 2004; CBI Regional Trends Survey, May 2004; PMI Northwest Report, The Royal Bank of Scotland, May 2004; Labour Market Statistics, ONS, May 2004, MORI Survey, October 2003

4 SUMMARY OF NWDA EXPENDITURE AND PERFORMANCE 2003/04.

Expenditure RES priority Business Development

Regeneration" Skils and Employment

Infrastructure Image Overheads Grand Total

Expenditure £000 93,516 200,303 10,926 12,731 5,319 34,916 357,711

% of

total

ex~enditure ,

26 56 2 6 1

100

" The Regeneration (RES) priority incorporates business development, skils and employment activity level, in support of community based regeneration strategies.

at a local

Core Outputs

--obs-ereated-lSafeQuarded-----~New Businesses Created / Attracted Brownfield Land Remediated / recycled (Ha) Learning Opportunities Created

Private sector investment (£m)

12,910 736 322 19,216 126

6;760 604 314 11,610

Actual

Target

119

% increase +gn%" +22% +3% +65% +6%

0°

Supplementary Outputs New/refurbished floorspace (sq m) Businesses ReceivinQ Specialist Advice

Businesses Assisted in skills needs Woodland created (ha)

242,807 4,355 1,682 153

120,744 3,175 1,169 143

Actual

Target

% increase ~"..... ii +101% L.~ . i _.0 +37% +44% - :,;: Z +7% Z., ..,.. 'j?5,

. r

Output performance for the year was much higher than anticipated with all programmes exceeding their targets, A number of projects came forward during the year, which were not anticipated when the targets were set. In the light of this the Agency has increased its targets for 2004/05, These are set out in the published 2004/05 Business Plan,

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NWDA KEY ACHIEVEMENTS 2003/04

The following section reports progress and achievements during 2003/04 against the Regional Economic Strategy (RES) objectives.

BUSINESS DEVELOPMENT 1 Exploit the growth potential of business sectors

· 11 Cluster programmes now operational, with around 13,500 Northwest companies now actively involved in cluster networks,

· Two new Clusters launched and operational: NW Automotive Alliance and Maritime NW,

· Over 600 SMEs received advice from the ERDF funded Regional Business Adviser Project, developed in partnership with Business Links, UKTI and the regional Cluster Organisations,

· 'Taste of the Northwest' launched to help small businesses improve their productivity, · Manchester

Business

School selected by the Harvard Business School to Tun an MBA level module

cluster development.

· 28 Foreign Direct Investment (FDI) projects were delivered (new investments and expansions),

. . . .

,Work started on US owned Chiron Vaccines' new state-of-the-art £65m biological plant, Liverpool. Construction started on the £120m Quinn Glass plant at Ince, Cheshire creating 300 jobs by 2007,

Austrlia. ~ t

ww.noe.com.au website established to promote the North of England as an investment location i~ ;o-!

under construction, ~~ ~

6 Incubators cO,mpleted, housing 35 companies and more than 250 employees, Two additional incubator~,' ",' i

Improve the competitiveness and productivity of business

~""

r',' .. b,-.~-~'

Over 50 major companies helped through supply chain recovery packages, expansion projects and training

programmes.

Alliance for Skills and Productivity Board established and Action Plan for 2004/05 produced,

80 offers of Regional Selective Assistance (RSA) grant representing over 5,900 jobs attracted/safeguarded, Projects include: o Pharmaceutical manufacturer Lilly's £45m investment at Speke o United Biscuits' expansion of sites in Manchester and Carlisle (160 jobs);

o The German Bosch Group's European contact centre in Liverpool (90 jobs); o Koito Aerospace airline seats manufacturing plant in Speke; Liverpool (21 jobs),

· A portfolio of business finance schemes continued to be supported including Northwest Equity Fund, Rising Stars Growth Fund and the Northwest Seed Fund, · Northwest Energy Council launched in December 2003. · Manufacturing Action Plan launched in October 2003,

· Agenda for Change Action Plan developed to help the region's 16,500 manufacturers streamline their processes,

· Manufacturing Advisory Service: 4000 companies accessed the service; 500 diagnostic visits made; 86 productivity projects completed resulting in productivity improvements worth £9m.

7 3 Develop and exploit the region's knowledge base

· Funding agreed for establishment of the Regional Centre of Excellence for Manufacturing and Technology on the former Michelin site, Burnley, providing accommodation for up to 20 SMEs,

· Funding agreed for Project Unity, the merger of the Victoria University of Manchester and UMIST to form a new world-class research institution, · First two buildings at Daresbury Science Park complete June 2004,

exploit research and

· New Vision for Daresbury signed by NWDA and CCLRC to provide opportunity to

development (R&D) at Daresbury Laboratory,

· Successful bid by the University of Manchester with NWDA support, to host the co-ordinating hub of the £60m UK Biobank project. REGENERATION 4 Deliver Urban Renaissance

Merseyside -.- ..l:iverpool-Vision-l:rban-Regeneration-eompany-pro-gress-euvarios projectsincluâing city centre -pul5lic----

realm improvements, City Square offce development and 101 Old Hall Street office development. Good progress was also made on the development of other flagship projects which will be completed in time for Capital of Culture in 2008. · The St Helens City Growth Strategy Development Plan was launched in November 2003, Two further PilOQt, _ '.' t;

Greater Manchester ~ ~

for Liverpool and Manchester to be taken forward in 2004" ~

, 'J::

· New East Manchester Urban Regeneration Company has progressed various project including lanZ ~ remediation for a major housing project in Beswick, refurbishment of Whitworth House for.an ICT and Med; '. ..,... ~ related learning facility, and

the first phase of Fujitsu Business Village on which construction started, . z,

· Compulsory Purchase Order powers used to assemble land and property required for the Ancoats Urban Vilage development in Manchester,

Cheshire .' Chester Business Park: expansion facilitated by new infrastructure works to create a further 2,700 jobs,

· Gap funding provided to faciltate the relocation of the Ivax pharmaceutical company to Preston Brook to create/safeguard 385 jobs,

Lancashire · Implementation of Blackpool Masterplan started and proposals for Blackpool Urban Regeneration Company submitted, · St Annes on Sea Town Centre: streetscape and environmental work in progress, · Whitemoss Business Park Phase I works completed, Phase 11 works underway, · Rural incubator opened at Myerscpugh College, Preston,

Cumbria · West Lakes Renaissance was fully established as the region's third Urban Regeneration Company and its investment programme approved.

· Redevelopment of the former Ironworks site in Barrow was progressed, providing an extension to Furness Business Park,

· West Cumbria Strategic Task Force set up by the Government, with Agency support, to address the longterm economic impact of nuclear decommissioning at Sellafield,

· The Barrow Task Force, established by the Agency, took a series of actions to counter substantial job losses in Barrow and Furness peninsular.

Across the region

. . . .

64 Single Regeneration Budget (SRB) schemes progressed, of which 24 completed in March 2004. "New Vision for North West Coastal Resorts" published in April 2003,

NWDA led the national pilot for the development of Brownfield Land Management Action Plans,

Newlands offcially launched in July 2003: This is a joint NWDA-Forestry Conimission project which aims to -reji:venate -.35-he-ctaresofâerelicflandacross-2ll-sites-õveraiveYear period~----- - -------------

Deliver Rural Renaissance

learning opportunities, Q ~ Lancashire Rural Partnership approved 8 projects (total value £5M), securing 192 jobs and creating 1320 ,

. Cumbria Rural Regeneration Company approved 40 projects (total value £12M) ~' ~

o Support for tourism marketing ~ ;.

International Uplands, ~ ¿;

o Business start up scheme to address low levels of enterprise · .J Ê o Creation of Centre

Cheshire Rural Regeneration Company approved 24 projects (total value £O,9M)

Secure Economic Inclusion

Ä major conference to provide links between the Muslim community and regional agencies was organised by NWDA in association with the Muslim Council of Britain and the Offce of the Deputy Prime Minister

NWDA funded a number of research projects throughout the year including:

o NWDA Childcare Provision Review; o Refugees - two studies by Refugee Action and the North West Consortium; o Barriers to labour market participation for Asian communities in Lancashire,

7 Develop and maintain a healthy labour market

· On 1 sI October NWDA assumed lead responsibility on behalf of the RDA network for Department for Education and Skills (DfES) and Department for Work and Pensions (DWP),

· Call Northwest launched in March 2004, This is a three-year project to support the development of a world - class call and contact centre industry,

· Five interactive events based on the 'Skills Festival' concept were staged in each of the region's counties. Innovation Centre (TIC), Farnworth, Bolton,

· Construction started on the Technical

· Skills for Life, a Basic Skills project, was launched in October 2003

INFRASTRUCTURE 8 Develop the strategic transport, communication, and economic infrastructure

· A 20-year Vision for Transport for the North of England completed in January 2004. · Regional Freight Strategy launched in November 2003,

· A North of England airport strategy commissioned on behalf of all three northern RDAs, The coherent plan of airport provision in the North was presented to the Government in response to its national consultation on the future development of air transport in the UK.

· , Regional Broadband Fund implemented with investment in a wide range of initiatives to help over 5,000 small and medium size businesses in Cheshire and Warrington, Greater Manchester and Greater Merseyside, 9 Ensure the availabilty ofa balanced portfolio of employment sites

· Alderley Park (Astri: Zeneca), Macclesfield, was designated as an aoditional strategic site and implementation programme approved, · NWDA confirmed support

for the outline planning application for Phases 1 and 2 of the Omega site.

.-IMAGE---------,------------10 Develop and market the region's image · Tourism Strategy for England's Northwest launched in June 2003,

, ~.;

· Five Sub Regional Tourist Boards estabiished. a ~

· Regional Events Strategy completed, ~ ~~

cross cutting priorities: "' In addition to action in r.espect of specific RES priorities and objectives, the Agency has pursued the fOIlOWi~ '~

REGION'S NATURAL RESOURCES

· A Green Office Group was established within the Agency to implement an Environmental Management System and Policy for the Agency,

· Operation Eden started, a pilot project building the capacity of the faith sector in Liverpool to deliver local environmental regeneration,

· The Renewables Biomass Fuel Research and Development Facility was established, a demonstration project for turning municipal waste into fuel pellets,

· ENWORKS (Northwest Waste Minimisation Initiative) was established, This is a new programme of business services designed to increase competitiveness by tackling business waste and increasing

resource efficiency,

· The Agency signed a memorandum of understanding with the Environmental Agency and developed and promoted a service level agreement with Sustainability NW,

PARTNERSHIP WORKING

The Agency continued to work with partners at regional, sub regional and local level to deliver the Regional Economic Strategy and, in particular developed productive working relationships with Government Office North West and the North West Regional Assembly:

During the year the Agency continued to work closely with sub regional partners to develop appropriate mechanisms to enable more effective delivery of the RES within each of the five sub regions, The Agency also

worked with the other two northern RDAs, ONE North East and Yorkshire Forward, and other regional stakeholders to take forward the Northern Way Growth Strategy,

么

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. II d'_

NWDA GOVERNANCE

The Board In December 2003 Clive Jeanes and Alan Manning were replaced by Joseph Dwek and Dave McCa11.

and has exercised that role on behalf of

Each Board Member has taken responsibility for a key area of business the Agency throughout

the year,

Board Members, including their main occupation, and interests are listed below, The full register of Board Members interests is available from the Agency's Headquarters in Warrington,

Bryan Gray MBE DL (Appointed April 2002)

Chairman of NWDA. Deputy Chairman of the Baxi Group Limited 2000-2004, Chairman of Baxi Technologies since March 2004, He was Chairman of the CBI North West Region unti November 2002 and Deputy

Chairman until September 2003, He was a Member of the Board of the University of Central Lancashire until

April 2003 and has been appointed Pro-Chancellor of Lancaster University from August 2003, He was Chairman of Preston North End Football Club until October 2001 and was a Trustee of the National Football

Museum until July 2003, In June 2002 he was appointed a Deputy Lieutenant for Lancashire and was appointed High Sheriff of Lancashire from April

2003 to March .2004,

Professor, Sir Martin HarrisCBE,DL (Appointed December 2001) DepUty. Chairman of NWDA. Vice chancellor, Ă&#x2122;niversity. of Manchester, Director of USS Limited and Universities UK. Chair of Manchester: Knowledge Capital NWDA area of responsibility,' Health and Daresbury, Nevile Chamberlain CBE (Appointed December 2001)

Chairman of Urenco Ltd, Chairman of the Manufacturing Institute, Trafford Park, and Chairman of Envirolink NW, Member of the Lancashire LSC, NWDA Area of Responsibility: Energy

, u

John Dunning CBE, JP, DL (Appointed December 1998) ::

Qw.

Chairman of Westmorland Ltd. Chairman of Cumbria Rural Enterprise Agency Ltd, , e NWDA Area ~f Responsibiliy: Rural issues including agriculture, tourism and market towns, ~r: D

Joseph Dwek CBE (Appointe December 2003) ~ Âż Executive Chairman and Chief Executive of Bodycote International Plc from 1972 until 1998, when he retire, . ~

Currently a Director of City Invoice Finance Ltd, Jerome Group PI, Penmarric Plc, J4B Plc, Opal Property Grou - 2" Ltd and Mercury Recycling Ltd; Chairman and Chief Executive of Worthington Group Plc, Former Chairman of The Mersey Basin Campaign but remains on the CounciL. Chairman of the Healthy Waterways Trust; Council Member of ENCAMS and a member of the Board of the DTI Environmental Innovation Advisory Group, NWDA Area of Responsibility: Manufacturing, Business Excellence and SMEs, Robert Johnston (Appointed December 2002)

Managing Director of The Visual Link Ltd, Director of Enabling Education Excellence and Director of The Visual Link Holdings Ltd. Member of the Cumbria LSC, NWDA Area of responsibilty: Technology and IT

Dr Pauleen Lane (Appointed December 2001) Lecturer in Geotechnics and Computing, Manchester Centre for Civil and Construction Engineering, UMIST, Deputy Leader Trafford MBC, Director English Partnerships, Audit Commissioner,

NWDA Area of Responsibilty: Support in Regeneration including Health, Environment, Derelict Land and , Housing.

Cllr Richard Leese CBE (Appointed December 1998) Leader (Labour) of Manchester City CounciL.

NWDA Area of Responsibility: Infrastructure, East Manchester, relationships with Local Authorities and Local Strategic Partnerships, Design Champion,

Dave McCall (Appointed December 2003) Regional Secretary of the Transport & General Workers Union and Chair of the North West TUC, A member of the Economic & Social Partners group in the North West Regional Assembly, Also serves on the Northwest Constitutional Convention.

NWDA Area of Responsibility: Skils, European matters, Social Inclusion, Black and Ethnic Minorities, Crime and Disorder.

Dennis Mendoros OBE DL (Appointed December 1998) Managing Director of Euravia Engineering, Chair of the NW Aerospace Allance and member of the NW Bank of England Economic PaneL. Chair of Pendle Partnership and Director of East Lancashire Partnership, Chairs the

NWDA led NW Innovation and Technology Advisory Board. Deputy Chairman of NWDA Enterprise and Innovation Sub Group, In March 2004 he was appointed a Deputy Lieutenant for Lancashire NWDA Area of Responsibilty: Business Support, Innovation, Technology, Foresight, the e-commerce element of ICT and Aerospace,

Cllr Marie Rimmer (Appointed December 2002) Leader (Labour) of St Helens CounciL. Chair of the Local Strategic Partnership, a Director of St Helens Chamber and The World of Glass, a Board Member of the Mersey Partnership, the North West Civic Forum and the North West Constitutional Convention, NWDA Area of Responsibiliy: Relations with the Regional Assembly

Ani! Ruia OBE (Appointed December 2001) Director of Wrengate Limited, NWDA Area of Responsibilty: International Trade, Inward Investment, Allance for Skíls and Productivity, Sport England, Remuneration Committee, Manchester Knowledge Capital and Seed CornlVenture Capital Funding.

Brenda Smith (Appointed December 2001) Group Managing Director, Ascentmedia Ltd, Deputy Chair, Granada Television Ltd, Managing Director, GrëloaCla TelevLsiooamLManël9lDgpireçI9IL SIlJdiQs_GranëlCla Plc until May2Q04. Baard Meniber,_ Liverp()ol Vision, Chair of the Regional Marketing Forum from December' 2002, NWDA Area of Responsibiliy: Support in Culture, Media, ICT (creative aspects), Communications.

Clir-MiKeStorey-CBF(Appointéa-Decémoer WmT- . Leader, (Liberal Democrats) Liverpool City CounciL. Board Member for Mersey Partnership, Speke Garston

Development Company until 31 March 2003, Liverpool Land Development Company from 1 April 2003, Liverpool Vision and Liverpool John Lennon Airport, Head Teacher Plantation CP School, Knowsley. NWDA Area of Responsibiliy: Voluntary, Mutual and Charitable interests,

Professor Maureen Wiliams Ph.D, (Appointed December 2002) , ,. Eu

Q"-

Chief Executive and founder of Merseyside Development Foundation; Honorary Fellow and Visiting Professo " ,.~ ~

of Sociology (Governance) at Liverpool John Moores University; Chair of the Big LO,ttery Fund's North wes~,'"" ; ~,,','~,','

Community and Voluntary Sector Funding Programme (previously The Community Fund), Co-founder ~ ~~

Community North West; Advisor and previous chair of Telescope Technologies Ltd,; Member of the Greatefzr~ ,,'?,: Merseyside Learning and Skills Council; Senior Expert Consultant with the Council of Europe. , " r: NWDA Area of Responsibiliy.' Relationships with Local Partners, LSPs/Community & Voluntary Sector -, 2'

Those members who left the Board in December 2003: Clive Jeanes OBE (Appointed December 1998) Former Managing Director of Milliken Industrials Ltd, Chairman of Elwers Engineering Ltd, and Chairman of

Excellence North West. Member of the Cheshire and Warrington Learning and Skills Council and RDA representative on the NW Science Council and New East Manchester, NWDA Area of Responsibiliy: Manufacturing, Business Excellence and SMEs,

Alan Manning (Appointed December 1998) North West Regional Secretary of the Trade Union Congress, Member of the Greater Manchester Learning and Skills CounciL.

NWDA Area of Responsibiliy: Skíls, European matters, Social Inclusion, Black and Ethnic Minorities, Crime and Disorder,

Board Meetings and Committees

· Eleven NWDA Board meetings were held during the year, · The Remuneration Committee convened on 2 occasions, · The Audit Committee had 4 meetings,

There are also a number of Sub Groups to the main Board that have met regularly throughout the year, In 2003/04 the Sub Groups were Business Development: Science and Innovation, Business Support; Marketing; Rural Regeneration; Urban Regeneration; Skills and Employment and Infrastructure.

13 Annual General Meeting

The Agency held an Annual General Meeting on 19 September 2003 at the Manchester International Convention Centre. Keynote speakers included acclaimed mountaineer, Sir Chris Bonington, TV personality

and celebrity chef L10yd Grossman and Liverpool Capital of Culture's Creative Director, Sue Woodward, The event was hosted by BBC TV news presenter Martin Henfield,

Code of Best Practice Board Members are governed by a Code of Best Practice, which amongst other things outlines:

The Board's requirement to demonstrate Public Service Values and their accountability for public funds The Board's relationship with Central Government. The role of the Chairman and Chief Executive, Corporate and individual responsibilities of Board Members.

Handling conflicts of interest. The Agency has ensured that the Code has been adhered to throughout the year and has robust and thorough monitoring and recording systems in place. Board Members have declared interests at particular Board discussions as appropriate, Staff have followed a similar requirement in compliance with the Agency's Code of Conduct.

----- - - --

Further information ~oncerning any of the above can be obtained from the Agency's Warrington Headquarter~,

, Open Government During the year the Agency fully complied with the Government's Code of Practice on Access to Information, In

relation to specific requirements of the Code: No requests for information were received which specifically referred to the Code;

No charges were levied for the information supplied; Q. ,ld

(the Ombudsman), ~ 5

No replies to requests for information exceeded 20 days; " . tt No complaints against the Agency were referred to the Parliamentary Commissioner for Administratio ยก;

Freom Oflntonnalion Act and lhe Publicalion ollnlonnalion Z ~ Section 19 of the Freedom of Information Act 2002 requires every public authority to adopt and maintain ~ publication scheme which relates to the publication of information by the authority and publish information in allows public authorities fallng within

accordance with its publication scheme, In addition section 20 of the Act

particular classes tu produce model publication schemes, Eight of the nine English RDAs agreed to a collective publication scheme which outlines the information that will be published by each of those RDAs, The Northwest

Development Agency took responsibility for the development of the RDAs model publication scheme and this was approved by the Information Commissioner in October 2002. The publication scheme is available at www,nwda.co,uk,

Service First The Agency is currently reviewing its Service First Charter which sets out our standards of service when dealing with outside, organisations and the general public, The review will consider more effective measures and ways

of monitoring performance,

Equal Opportunities and Diversity The Agency has continued to implement its Equal Opportunities and Diversity Strategy which sets out three broad headings under which the Agency will fulfill its obligations: as an employer, as a programme deliver and as a leader / catalyst within the region.

Appendix 1

Northwest Development Agency Environmental Policy Our aim is to contribute towards the delivery of sustainable economic development in the region and ensure that environmental objectives are integrated into relevant business objectives, We are, committed to the continual improvement of our environmental performance and we will conduct our own activities and operations

to reflect best environmental practice, Specifically, in the short term we will:

· Review our activities, operations and procedures to identify environmental aspects and prioritise actions to address them;

· Implement an environmental management system appropriate to the location, scale and nature of our activities to demonstrate our commitment to the Greening Government Initiative and 'A Better Quality of Life', the Govèrnments Sustainable Development strategy; · Establish an environmental management Steering Group to drive forward commitments made in our

environmental policy and provide regular (minimum of biannual) progress reports to the Board;

· Take measures to increase staff awareness of environmental issues and individual environmental responsibilitiesandenstlre that-environmental' managementis-incltlded,withinour staff~indtlctionand training programmes; -. Develøp and implement

a Green TraveIPlanforbusiness-and-commutertravel' fOfallofotlfoffcesand

actively encourage staff to think about and where possible change their travel behaviour;

· Establish recycling schemes for all appropriate waste streams in each of our offices.

In the longer term we wil: Q G · Reduc,e energy and re,source ,consurrption, within the Agency by promoting effective and efficie' , ~

reduction methods consistent with best practice; ~ ~ · Set and achieve measurable targets against agreed baselines acros the Agency for key perfrran'k~ ; crit~ria such as ,energy, ~ransport, em~ssions: w,aste, water and environmental incident~, This include. . ~

setting appropriate environmental Tier 3 indicators and targets to measure our impact on t~ - - :2

environment of the region e,g, CO2;

· Meet and, where possible, adopt best praotice regarding all relevant UK, European and International environmental legislative and regulatory requirements and identify staff responsible for developing a register of environmental legislation of relevance to the Agency and monitoring environmental legislative compliance;

· Where appropriate, use the most resource-effcient technologies and media for communicating and maintaining records of documentation;

· Purchase, wherever possible, environmentally-preferable goods and services and influence our suppliers and contractors to ensure that goods and services procured support our environmental procurement policy;

· Ensure that all projects and programmes we fund are appraised for their environmental and sustainable development impact, e,g, through procuring sustainable building materials; · Develop a communications policy to share information and best practice with

others to help contribute

to a better understanding of environmental and sustainable development issues; · Publish in a limited paper form, and make available on our web-site, an environmental report with

information on our environmental performance and progress against corporate targets;

· Ensure good management practice by repeating an Environmental Audit of the organisation every two years, by a third party and review and revise this policy statement accordingly,

NORTHWEST

FOREWORD

DEVELOPMENT AGENCY FINANCIAL STATEMENTS 2003/2004

TO THE FINANCIAL STATEMENTS

Statutory Background The Northwest Development Agency ('the Agency') was established under the provisions of the Regianal Development Agencies Act 1998, It came into existence on 14 December 1998, following Parliamentary approval of the Regional Development Agencies Act 1998 and the appointment of Board Members,

The Agency became fully operational on 1 April 1999 when it took over the regional aCtivities of El'gHshPartnerships and the Rural Development Commission and the SRB --Ghallenge-Fundformerlyadministered-by-Government8ffice-for

the

North West under. -

the provisions of the Regional Development Agencies Act 1998. . Tl1è businesSóf Il1wardTtd was tfc:lIisferred iritotFie-Ägency- by a -Business Tral1sfe-f .... Agreement on 1 April

1999.

Statement of the Agency's and Chief Executive's Responsibilties Under section 14 of the Regional Development Agencies Act 1998 the Agency is

required to prepare a statement of account for each financial year in the form and on the Q"-" W basis determined by the Secretary of State, with the consent of Treasury. The Financial Statements are prepared on an accruals basis and must give a true and fair view of the' ~,~.~ :c

Agency's state of affairs at the year end and of its income and expenditure, total

~¡ ~Q

recognised gains and losses and cash flows for the financial year.

" . ~

In preparing the Financial Statements the Agency is required to:

. Observe the Accounts Direction issued by the Secretary of State, including the relevant accounting and disclosure requirements, and apply suitable accounting

policies on a consistent basis; i

. Make judgements and estimates on a reasonable basis; . State whether applicable accounting standards have been followed, and disclose and

explain any material departures in the Financial Statements; . Prepare the accounts on the going concern basis, unless it is inappropriate to presume that the Agency wil continue in operation,

The Accounting Officer for the Department of Trade and Industry has designated the Chief Executive as the Accounting Officer of the Northwest Development Agency. His

responsibilities as Accounting Officer include responsibility for the propriety and regularity and value for money of the public finances, following guidance issued by Government; the keeping of proper records; and advising and informing the Board of financial considerations. These requirements are set out in the "Non-Departmental

Public Bodies' Accounting Officer's Memorandum" issued by the Treasury and published in Government Accounting.

Financial

Memorandum

of State issued the Agency with a new Financial Memorandum in August 2003 setting out the financial framework' under which the Agency should operate. The

The Secretary

Agency has complied in all material respects with the terms of this memorandum during the course of 2003/04.

These Financial Statements have been prepared in the form directed by the Secretary of State for the Department of Trade and Industry and the Accounts Direction is set out on page 62.

Results for the Year and Transfer to/from Reserves The results for the year ended 31 March 2004 are contained in the attached Financial Statements. There was no surplus or deficit for the year after taxation (2003: £9.23m deficit).

Significant Changes in Fixed Assets On 1 April 2003 Investment Assets with a value of £82,50m were held by the Agency, -During the-year-there. were

additions

cost .of£4,37mand-disposals-fromthis

portolio with an aggregate book value of £6.68m and which realised £9,87m, At 31 March 2004 the Investment Asset portolio was professionally revalued at £81 ;59m and the resultant surplus of £1.40m was written back to the Income and Expenditure Account, to be offset against unrealised deficits previously charged.

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Post Balance Sheet Events On 1 April 2004, the Agency acquired the assets and liabilities of the North West Tourist Board (NWTB) - which ceased to trade on the same day. The net liabilities transferred

amounted to £0.65m, which wil be brought into account during 2004/05,

~~.. ..........~,..

'. . ... ~ .~ t;

Also, on 1 April 2004 the administration of the Enterprise Grant Scheme and Small Case Regional Selective Assistance Schemes transferred from the Small Business Service to of a new programme entitled the Regional Development Agency (RDA) and became part

Selective Finance for Investment in England.

Review of Activities During the year the Agency continued to operate its programmes of activity across the

region in support of the priorities set out in the Regional Economic Strategy. Key achievements are set out on pages 6 to 9,

The Agency's principal source of funding this year was the Single Programme received from the Department of Trade and Industry. Other sources of income included European

funding, Small Business Service funding, Coalfields funding from English Partnerships, capital receipts from the disposal of. assets and rental income from the Agency's Investment Portolio,

From 1 October 2003 the Agency took lead responsibilty for all RDAs in engagement with the Department for Education and Skills and the Department for Works and employment, policy

Pensions thereby having a lead role in the development of skils and

and business support and delivery mechanisms.

i 7

From April 2003 the Agency was appointed by the Department of Trade and Industry to

pilot an integrated business support package for the small, medium enterprise sector, funded by the Small Business Service, This includes regional management of the seven NW Business Link Organisations and monthly distribution of the core funding received, The funding allocation is based upon the number of businesses within each sub-region.

Income

Grant-in-Aid and transfer from Government Grant reserve Other Grants received

European Funding & transfer from European Funding Reserve Capital Receipts Revenue

Receipts- - -- - -- ---

79 264,355

282,165

2003 £'000

2004 £'000

14,816

5,123 16,158 19,-32"7.

418

Other Income Speke Garston Developments Ltd,

-SmaIlBüsiiiess-ServiceFLlriding-" .. Total

18,859

356,866

7,062

9,607 3,589

. '6:-12~-44--0 0 5

4,276 3,882

100 305,115

4 2 1

100

Expenditure .~

26 55 2 6

93,910 197,490

2004 £'000

2003 £'000

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~ C',

~"7

~ ._- It , L'-,L ''':2 ';-~

Business Development

1,477 10,781

Speke Garston Developments Ltd.

57,993 194,883 7,414 12,384 4,927 21,943

5,319 34,916 2,816

Skills Infrastructure Investing in Image & Environment Administration Coalfields

Regeneration

Total

10,926 12,731

358,108

"' ~~

'0 :$~

4 2 7 1

100

100 311,802

Future Developments For 2004/05 there are a number of strategic priority initiatives that the Agency will lead

on and take forward. From 1 April 2004 the Agency will undertake, for a six-month period, the Chair of Chairs role on behalf of all the RDAs. This wil involve representing the RDAs in strategic policy discussions with Government Departments and Ministers, and leading RDA collaboration.

From 1 April 2004 the Agency wil be responsible for administration of the Selective Finance for Investment in England and from 1 March 2004 the Agency assumed the role as a statutory consultee on major planning applications.

From 1 April 2004 five new sub-regional Tourist Boards are in place and the Agency will

work closely with them to implement the Northwest Tourism Strategy through the delivery of their business plans.

During 2004/05 the Agency will seek to achieve Investors in People accreditation,

Board Mem bers Board Members are appointed by the Secretary of State. They include Local Authority, Trade

Union, Community and Private Sector representatives. Their corporate

responsibilities are detailed in the Code of Best Practice for the Board of the Northwest Development Agency, which is a public document available from the Agency's offices, Bryan Gray MBE, DL, Chairman (Appointed 1 April 2002) ProfessorSirMartin Hcirris CBE, DL, DeputyChairman (Appointed December 2001)

Nevile Chamberlain CBE (Appointed December 2001) Joseph Dwek CBE (Appointed December 2003) Robert Johnston (Appointed December 2002) Or Pauleen Lane (Appointed December 2001) CnrRlcnara--(éeseCBE (Appoír"ìed'Decembei1998) Dave McCall (Appointed December 2003)

Dennis Mendoros OBE (Appointed December 1998) John Dunning (Appointed December 1998) Cllr Marie Rimmer (Appointed December 2002) Anil Ruia OBE (Appointed December 2001) Brenda Smith (Appointed December 2001) Cllr Mike Storey CBE (Appointed December 2001)

Or Maureen Wiliams (Appointed Decernber 2002)

Those members who left the Board in December 2003:

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Clive Jeanes OBE (Appointed December 1998)

Alan Manning (Appointed December 1998) of their areas of responsibility

Brief biographies for the Board Members and details within

the Agency, for 2003/04 are shown in the Annual Report section of this document.

Board Members are contracted to carry out two days work per month on behalf of the Agency, The Chairman is contracted for three days per week and the Deputy Chairman one day per week.

available on

The Agency maintains a Register of Board Members' Interests, which is

request by contacting the Executive Director of Operations at the Agency's offices at

Renaissance House, Warrington. Members declare their interests to the Board in any transactions involving relevant organisations and do not participate in any discussions or

vote on any related matters.

Appointment of Chief Executive Mike Shields was Chief Executive until 31 August 2003. On 28 April 2003 Steven

Broomhead was appointed as Chief Executive Designate and was subsequently appointed Chief Executive on 1 August 2003,

" .,~

ì\

Employment of Disabled Persons The Agency is committed. to providing equal opportunities for all and will make reasonable adjustments to working 'arrangements to meet special needs. We will work

towards an environment and culture where everyone is encouraged and supported to develop their full potential regardless of individual characteristics, which may limit a person's opportunities in life,

Provision of Information to and Consultation with Employees The Agency is fully committed to effective and open communication and consultation

with its employees. This is achieved through a variety of means including a Staff Consultative Committee involving the Public and Commercial Services (PCS) and Prospect Trade Unions together with staff representatives; a Health and Safety Committee; and staff events to communicate key issues and receive feedback.

Better Payment Practice Code The Agency is committed to the Better Payment Practice Code and aims to pay 95% of . all undisputed invoices either-within-30

days-or-the

terms

agreed

with

the'supplier

In .2003/04 the Agency did not achieve this target paying 67% (2003: 76%) of invoices within 30 days, The Agency implemented a new financial ledger system during 2003/04

financial year and this has had some short term impact on the processing times for payments. This situation has now been resolved and the Agency is back on a standard payment profile,

Audit Services The Comptroller and Auditor General is appointed by statute to audit the Northwest Development Agency, and reports to Parliament on the truth and fairness of the annual Financial Statements and the regularity of income and expenditure. The following costs have been incurred in relation to services provided by the Comptroller and Auditor General: Audit Services

'Q-.,~ ~:"~~ ~, 'i,!

ÂŁ66,000

The Comptroller and Auditor General also has statutory powers to report on economy, efficiency and effectiveness with which the Agency has used its resources, The Agency has been involved in a value for money review during the year, along with the other Regional Development Agencies and several of the funding departments. In November 2003 the Comptroller and Auditor General published the 'Success in the Regions' report

on how the Agencies and the departments work together, The full report can be found on the National Audit Office Website at ww.nao.org.uk.

Statement on the Agency's Policy for Conserving Energy, Reducing Waste and Minimizing the Release of Greenhouse Gases In 2003/4, the NWDA Board ratified an environmental policy for the Agency. The environmental policy commits the Agency: to implementing an environmental

management system; to develop and implement a green travel plan; to reduce energy

and resource use within the Agency and to set and achieve measurable targets for energy, transport, waste and water use, An action plan has been developed to drive the

implementation of the policy. The Agency now regularly measures its resource

consumption for its key environmental aspects and several waste reduction measures have been implemented,

The NWDA has a role in influencing the sustainable economic growth of the region, The joint programme with the Environment Agency and several

Agency has supported a

other RDAs to model the environmental impact of different future economic scenarios, This work has helped to inform the region of its key enviro-economic risks, particularly for waste streams. The NWDA has also signed a Memorandum of Understanding with the Environment Agency (NW Region),

Through its Single Programme expenditure, the Agency also has a role in assisting businesses to improve their productivity and competitiveness through promotion

of environmental best practice. In 2003/4, the Agency funded business support programmes of work which will: minimise the waste production of over 10,000 SMEs; reduce the waste production of manufacturing companies; aid businesses ,. ___,.,_""~~JrLS§l12lJl.êlj!1g~ttieir~!J~rgY=YS~canc9_.c~Q2.emjsJ¡,iQIls'LlolI'Gre("is~.:Jli~tJJRta.~~ of,..reneWÆ_bJe~_________

energy technologies. The Agency has also modified its project appraisal system to

efficiency. '

ensure that all RDA funded projects are assessed against their contribution to environmental protection and resource

----_._-

The Northwest Development Agency Environmental Policy is laid out on page 14,

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Accounting Officer:

~~~ ~"'~'

Statement on Internal Control Scope of Responsibilty for maintaining a sound system of internal control that supports the achievement of the Agency's policies, aims' and objectives, whilst safeguarding the public funds and the Agency assets for which I am personally responsible, in accordance with the responsibilities assigned to me in Government As Accounting Officer, I have responsibilty

Accounting, and supplementary guidance issued by HM Treasury,

I also ensure that the Agency continues to operate within the framework specified by the Secretary of State and the Department of Trade and Industry (DTI) in the Agency's Management Statement and Financial Memorandum. I use a common mechanism for obtaining assurance on the adequacy, effectiveness and efficiency of the Agency's risk

management, control and governance prĂĽcesses. This document constitutes my statement on the effectiveness of internal control. ____.'-__--,,~.c,__.,,~~o-..~~_"c;"_~ -..,.::-_==:. ;;:-o::.-_~o=::=--~=.::.:'--;~.._~ ______~______ ____ __ _ __________ ____-,_0_____.____ __ _o_____,________~_____ ___..___..~____________._____ "_.. _.___._0_

The Purpose of the System of Internal Control The system of internal control is designed to manage risk to a reasonable level rather to- eliminate--allrisk-of .fail u reto--aoh ieve--polioies,-aimsand .objectives;.....it--can-.-

. - -than

therefore only provide reasonable and not absolute assurance of effectiveness.

The system of internal control is based on an ongoing process designed to identify and

prioritise the risks to the achievement of the Agency's policies, aims and objectives, to evaluate the likelihood of those risks being realised and the impact should they be realised, and to manage them efficiently, effectively and economically.

The risk assessment and management process was not operational for the whole year, but all aspects of the system of internal control are now in place.

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Capacity to Handle Risk The BoĂ¤rd sets the Agency's policy and attitude towards risk. Its members are

independently appointed by the Secretary of State. The Board, its Committees and delegated Sub Groups provide a challenge to management and approve all material business cases that exceed the Chief Executive's delegated authority, ' The Corporate Management Team, led by the Chief Executive, is responsible for the operation of the Agency's corporate risk management process. An Interim Head of Risk Management and Assurance, who was appointed during the year, supports the process

and provides risk reports to the Corporate Management Team.

The Audit Committee reviews and monitors the Agency's corporate risk management and assurance processes, and receives quarterly reports from the Interim Head of Risk Management and Assurance and the Internal Auditors.

During the year, the Board and the Corporate Management Team have participated in facilitated risk workshops to identify and assess the Agency's key risks and to provide risk management training and awareness.

The Risk and Control Framework in the Combined Code on Corporate Governance: the control environment and control The system of internal control consists of the following key elements as outlined

activities, risk assessment and management, information and communication, and monitoring.

The Control Environment and Control Activities · The Agency operates within the control framework specified in the Management Statement and Financial Memorandum underpinned by Financial Regulations.

· A scheme of delegations exists to ensure that significant decisions are taken at the appropriate level with all decisions in excess of £10 million requiring DTI approval,

(£5 millon to the 16 October 2003), Where the Agency's proposed expenditure for a

project exceeds £20 milion, the Agency must obtain the consent of the Treasury as well as the Secretary of State,

A interim Head of Risk Management and Assurance was appointed in October 2003, with the aim of: · Improving the Agency's systematic risk management process to meet the Treasury

requirements; · RaisirigJhe,PJ9fUeOflÌ§ls_ilcina9effentwithjn1hsLAgency;,.

· Facilitating risk awareness, identification and mitigation workshops; and

· Providing the Corporate Management Team and the Audit Committee with reports on the current status of risk within the organisation.

Risk Assessment and Management · The

Wo !O

Q'~"'~ 'C;~'~

Agency's risk management policy and strategy requires the management of risk operationaL.

at four levels - strategic, programme, project and

· Strategic risks are identified, assessed and managed by the Board, its Sub Groups,

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~~' ".;~""~, z,E'

and the Corporate Management Team through regular meetings where the Agency's plans and strategic direction are considered and reviewed.

· Strategic risk registers have been developed from workshops undertaken during the year. These registers currently record the risks identified and assessment of impact

and likelihood, but plans are in place to develop these further to record the key control mechanisms and risk treatments in place for significant risks.

· Programme and project risks are identified, assessed and monitored in accordance with the Single Programme Appraisal Guidelines issued by the DTI, with investment decisions supported by formal project appraisals, and an analysis and assessment of risk. Programme and project risks are recorded within individual project files.

· Operational risks are identified, assessed and managed by the Agency's Executive Directors and Senior Managers. Significant operational projects, such as the replacement of the existing finance system, completed a formal risk assessment as part of the 'PRINCE 2' methodology.

Information and Communication

· The Board meets eleven times per annum and receives progress reports on, significant projects, a monthly finance director's report on the Agency's financial

position, and the Agency's quarterly performance report that summarises progress against key outcome targets.

· The Corporate Management Team meets fortnightly to make key decisions, agree actions and specific initiatives and to review financial and operational performance.

· Key decisions made and actions agreed are communicated to managers via a monthly core briefing session and cascaded to all staff through regular team meetings.

· Specific policies and procedures are approved by the Corporate Management Team and delivered to the relevant teams through induction training, team meetings, and via email and the Intranet. These address issues such as project appraisal and monitoring, financial management and control, procurement and other legislation.

Monitoring A range of procedures are used to monitor the effectiveness of specific internal control

mechanisms, including management monitoring and review of performance against internal audit reviews,

targets, monitoring of grant and write offs, and

. ìh~-,Agency'slnternarAüditors -fe-p6l'rlõ-tlieÄi.âilCömmiftée"öritfie-effectiVeness' 61'"

internal control systems, and follow up procedures are in place to ensure there is an appropriate response to improvements identified.

The Audit Committee monitors the overall system of risk management and control on behalf of the Board, through the receipt of quarterly reports on specific aspects of the

system, As part of its risk management strategy, the Agency is also planning to introduce key risk indicators and reports from Executive Directors on risk management and internal control.

. ~ w.

Q:.

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The key improvement areas included in current plans are as follows:

',- c__ rt,z Z~i.~

· Risk Management - A revised risk management policy, strategy and process has been agreed by the Corporate Management Team and approved by the Audit Committee.

· Programme Management System - An independent review of the Agency's programme management system, which is used to manage and monitor all projects, was undertaken in the year, and a programme of action to significantly improve the effectiveness of this system has been agreed.

· Internal Financial Reporting - A number of improvements to the internal financial reporting processes to provide improved monthly management accounts have also been implemented.

Review of Effectiveness As Accounting Officer, I have responsibilty for reviewing the effectiveness of the system

of internal control. My review of the effectiveness of the system of internal control is informed by the work of the Internal Auditors and the executive managers within the Agency who have responsibility for the development and maintenance of the internal control framework, and comments made by the external auditors in their management

letter and other reports,

I have been advised on the implications of the result of my review of the effectiveness of

the system of internal control by the Board and the Audit Committee, and a plan to address weaknesses

and ensure continuous improvement of the system is in place.

and Accounting Officer:

~)~

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L"":o -:

"-'l :iยก; Z'~ยก~

Northwest Development Agency 2003-04

The Certificate of, the Comptroller and Auditor General to the Houses of Parliament and the Northwest Development Agency I have audited the financial statements on pages 27 to 62 under the Regional Development Agencies Act 1998. These financial statements have been prepared under the historical cost convention as modified by the revaluation of certain fixed assets

and the accounting policies set out on pages 30 to 33.

Respective responsibilties of the Northwest Development Agency, the Chief Executive and Auditor t...-=~..::.:.::=-~--=.~==~=:::===,,=.:~:;:;;-"=~'".="'=,=-=~--~=~c:=---_:::::====---:-==.=.-",,_

As described on page 15, the Northwest Development Agency and Chief Executive are

responsible for the preparation of the financial statements in accordance with the and... directions-made-lhereunderby-lhe -

Regional..... Development

Agencies -Act-"1998

Secretary of State and for ensuring the regularity of financial transactions. The Northwest Development Agency and Chief Executive are also responsible for the

preparation of the other contents of the Annual Report. My responsibilties, as independent auditor, are established by statute and have regard to the standards and guidance issued by the Auditing Practices Board and the ethical guidance applicable to

the auditing profession. I report my opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Regional Development Agencies Act 1998 and directions made thereunder by the Secretary of State, and whether in all material respects the expenditure and income have been applied to the purposes intended by Parliament and the financial transactions conform to the authorities which govern them. I if, in my opinion, the Foreword is not consistent with the financial statements,

also report

if the Agency has not kept proper accounting records, or if I have not received all the information and explanations i require for my audit.

I read the other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. I consider the implications for my certificate if I become aware of any apparent misstatements or material inconsistencies with the financial statements. whether the statement on pages 21 to 24 reflects the Agency's compliance with I review Treasury's guidance on the Statement on Internal Control. I report if it does not meet the requirements specified by Treasury, or if the statement is misleading or inconsistent with

other information I am aware of from my audit of the financial statements. I am not required to consider, nor have I considered whether the Accounting Officer's Statement

on Internal Control covers all risks and controls. I am also not required to form an opinion on the effectiveness of the Agency's corporate governance procedures or its risk

and control procedures.

':~~,~=..~~""_'"

"_._--------_. _._---_._-----~_._-------

__;o'":;~:.-~.~__..,.._~:.7;;~,~~:.,; ..=_-::::_.:~:.-=__ ~:;:~..:._-::~ __ -_:::.~~;;.~

Basis of audit opinion i conducted my audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence

relevant to the amounts, disclosures and regularity of financial transactions included in the financial statements. It also includes an assessment of the significant estimates and judgments made by the Northwest Development Agency and Chief Executive in the

preparation of the financial statemènts, and of whether the accounting policies are appropriate to the Agency's circumstances, consistently applied and adequately

disclosed. I planned and performed my audit so as to obtain all the information and explanations which I considered necessary in order to provide me with suffcient evidence to give reasonable assurance that the financial statements are free from material misstatement, and that, in all material

, whether caused by error, or by fraud or other irregularity

I i=~~~="--c~,respectsrtl48=exRditur8=and=ii:Gome=bave=beei:applieGktG=tl:8=pur;pos8SintendeGkby=c====~=,,-~ : ¡ Parliament and the financial transactions conform to the authorities which govern them.

In forming my opinion I have also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion In my opinion:

· the financial statements give a true and fair view of the state of affairs of the Northwest Development Agency at 31 March 2004 and of the surplus, total recognised gains and losses and cash flows for the year then ended and have been properly prepared in accordance with the Regional Development Agencies

Act 1998 and directions made thereunder by the Secretary of State; and &rn · in all material respects the expenditure and income have been applied to the

purposes intended by Parliament and the financial transactions conform to the authorities which govern them.órY I have no observations to make on these financial statements

~ß~

John Bourn

Comptroller and Auditor General Date

I~A ~ ID~

National Audit Office 157 -197 Buckingham Palace Road Victoria London SW1W 9SP

f,~_

INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR TO 31 MARCH 2004

Notes

2004 £'000

Income Grant-in-Aid Transfer from government grant reserve Transfer from European deferred income Coalfield and other government grants Clawback of grant and contributions European funding Proceeds from disposal of Development Assets

2 22 19

. Proceeds from disposal of Investment Assets Proceeds from disposal of

Operating

263,625 19,498 8,877 2,419 4,063 7,281 7,074 9,871

Assets

Rents and maintenance charges 13,135

Other income 5 2,561 TOTAL INCOME 357,263

2003 £'000

232,526 31,829 9,607 3,555 3,678 4,631 6,106 10

12,378

"""~~~~~Small=BtJsiness~SefVieecft.nding'~~~~~~=~"'~"~~C,""cc=~-.~~",~===c~c==c1'8C,"859~c=

795 305,115

Expenditure__ _____

14,128 45,775

7 8

31,468

17,026 (1,402) 397 100

Environmental Provisions

16 13 14

406

3,481

4,071 4

5,339

6,682

Book value of Investment Assets sold Book value of Development Assets sold Book value of Operating Assets sold Bad debts and movements in provision for bad and doubtful debts Development Assets written down Investment Assets written back I nvestments written down

Salaries and wages Other administrative costs Non grant programme expenditure Grants paid for programme expenditure Non grant coalfield expenditure TOTAL EXPENDITURE

13 16 12

5,1731'

Operating (Deficit) I Surplus Interest receivable Notional cost of capital

6 9

(Deficit) for the year on ordinary activities

Taxation

(Deficit) for the year after Tax Reversal of notional cost of capital

300 10,784 33,347 2,1421 224,90~

(14,807) ,

(5,821)

846 (8,966)

833 (5,809)

(6,687)

(845)

311,802

263,961 1,787 358,108

(18,199) 8,966

(5,809)

(3,392)

5,809

(Deficit) I Surplus for the year carried forward

õ Q"~ '. " ',.~ is

_. , ¡-

~'=?

2:~ , , .. :S:-:, .,-,

- . " t~:

.....~ - . - 2.:.

(9,233)

All activities are from continuing operations,

---_._-------~-----~._-----------------~-----_._------------.. ,.-..,_,c'c--.----cc--:---c'c - .... .. ..,. .. -. .... --..--.~.-."...... .. ..-. .-,..- - --. -- ... -.., - .- .. - . _

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 31 MARCH 2004

Revaluation on Investment Assets

(9,233)

(Deficit) I Surplus for year carried forward

2003 £'000

2004 £'000

463

Grant receivable not released to the 42,406

Income and Expenditure Account

42,235

.~.::o::::::o.:.__.:_.__."_-,:=-:::._._,-_=-_:_:_,,_::::,:_:::-,.::,-:::::,:,:~..::.;o-_~::.;_.:...:_.:. - :"~_..,-.:'~. :.- -:;~- ._;":~-,,:_" :.:::-"...::.,,--="':::-.:-:--:..'--= c.::::::::-=::-~";:o.=;::=--~:;;:..:::;:::=.:_=_::_-_-_:.:=:=_:===___~=__:=,,=_

42,406

gains

33,465

Q'."~ ~"'tŠ' .. . ~"

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BALANCE SHEET AS AT 31 MARCH 2004 Notes FIXED ASSETS Intangible Operating Assets Tangible Operating Assets I nvestment' Assets

2004 £'000

2003 £'000

67,330

77,612

87,288

91,138

3,733 82,498 1,057

4,491 81,587 4,979

12 13 14

CURRENT ASSETS Stock of Development Assets

Investments

Debtors Cash at" banckaneITn"Fian(r'~~~--------

CREDITORS:

17 ,,=o-24'~='c~,cc_----

~~§,4eJL,~====~_ .cai!§~§_____

110,889

148,422

10,724

34,344

Amounts fallng-

due within one year

NET CURRENT ASSETS

PROVISIONS FOR LIABILITIES AND CHARGES

CREDITORS: Amounts falling due after more than one year

TOTAL ASSETS LESS TOTAL LIABILITIES

(53,746) 94,676

(43,879) 67,010

(2,104)

Ç.

Õ r fQ"g "~L è3

(3,239) 180,471

(3,248)

151,050

tf't( " ;'i d~ ~;~.,

~~'l

RESERVES

17,471

European Funding Reserve

(9,089) 172,089

Government Grant Reserve

Income and Expenditure Reserve

180,471

4,824. 146,226

151,050

APPROVED BY THE BOARD 9 JULY 2004

Accounting Officer

~ttCbít~ Chairman

The notes on pages 30 to 62 form part of these account

......l..,..,.,............ tooz inr ~ I

ra ~1Ă n ~ ~ 31 fW

CASHFLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2004 Reconcilation of Operating Surplus to net cash (outflow) from Operating Activities OPERATING ACTIVITIES

2004 £'000

Operating (Deficit) / surplus (845) Transfer from government grant reserve (19,498) Transfer from European funding reserve (8,877)

2003 £'000 (6,687)

(31,829)

(6,106)

Proceeds from the disposal of Investment Assets (9,871)

817

Depreciation and Amortisation 1,1 02

Book value of Operating Assets sold 4

~~~~_~_~==BoocJaluec~otliiv.estrnerilAssets"sold=c~,~"=,,,~,''''''""=,=,="=~",~"",,,,~,==,=,,=,,=,=,,,'='',,''."ai682~,==,=""=,=",=",'-=,5f339,=~,~,,=,,,

Write back of Investment Assets (1,402) Additions to Stock of Development Assets (31,379) ,- 800kvalue of

Development

sold -4,071

Write down of Investments 274 Assets

(41,368) 3;481

Write down of Development Assets 17,026 Proceeds from the disposal of Operating Assets Increase in Debtors

e õ

(4,659) 9,867

Increase in Creditors and Provisions

100

Environmental Liability provision increase/( decrease)

431

Increase in Creditors due after more than one year

European advance funding for BIS

17,471

Subsidiary Undertaking

229

Net Cash (Outflow) from operating activities CASHFLOW STATEMENT

(19,503)

(39,306)

Returns on Investments and Servicing of finance

Interest Received Taxation

833

UK Corporation Tax paid

1,040

846

(33)

Capital Expenditure and Financial Investment Purchase of Fixed Operating, Investments and Investment

Assets Proceeds on disposal of Fixed Operating and Investment Assets

Cash (outflow) before financing Financing for Investment, Developmentand Operating Assets

Increase in Cash

(10,633)

(4,466)

(36,843) 42,235 5,392

(18,392) 42,012 23,620

6,116

9,871

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004

Basis of Accounting

(1 )

ACCOUNTING POLICIES

been

The Financial Statements of the Northwest Development Agency have

prepared in a form directed by the Secretary of State for Trade and Industry,

with the approval of H M Treasury, in accordance with the Regional

Development Agencies Act 1998. The Financial Statements have been prepared as set out in Treasury guidance under the modified historical cost basis as explained in the sub-paragraphs below and in accordance with

applicable Accounting Standards. Compliance with SSAP 19 "Accounting for

Investment Properties" requires departure from the requirements of the Companies Act 1985 relating to depreciation and an explanation of the ="depa=rfcre-'ls-glvefrírrnote'l~3roeroW:='=o=~~'~"c"o"~==_~~~c.'_'C'.".c~.==~~=c,~c_=_~_~___~_""

(2)

Basis of Consolidation

In 2003hOsèpàratè Income and ExpenditürE3Accounfwas presented (Or the Agency as provided by Section 230 of the Companies Act 1985. The consolidated Financial Statements in 2003 incorporate the Financiåi Statements of the Agency and its subsidiary undertaking Speke Garston Developments Limited, The comparative figures for 2003 therefore relate to the group comprising of the Agency and Speke Garston Developments

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Limited. Whereas the 2004 results relate only to the Agency,

The total assets less total liabilities and financial results of Estuary Management Company Limited and Rural Regeneration Cumbria are' not

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material to the Agency. In accordance with FRS2, Consolidated Financial Statements have not been prepared by the Agency.

(3) Fixed Assets - Investment Assets

The portolio of industrial and commercial investment properties held at any one time is treated in such a way that surpluses and deficits on revaluation of industrial and commercial properties are netted off, Any overall write-down of these properties to open market value, and subsequent adjustments thereto,

are accounted for annually and separately identified in the Income and Expenditure Account. Any overall surplus on revaluation of these properties to open market value, and subsequent adjustments thereto, are credited to the

government grant reserve after eliminating the overall accumulated unrealised deficit, as originally charged, by revaluation adjustment, to the Income and Expenditure Account.

Valuations are carried out in accordance with best practice as contained in the

Statement of Asset Valuation Practice and Guidance Notes (4th Edition) published by the Royal Institute of Chartered Surveyors.

A valuation for the whole portolio was carried out as at 31 March 2003, which was undertaken by King Sturge, International Property Consultants,

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

1 ACCOUNTING POLICIES (CONTINUED) In accordance with SSAP 19, no depreciation is provided in respect of investment properties. This departure from the requirement of the Companies

is, in the opinion of the Board,

Act 1985 for all properties to be depreciated

necessary for the Financial Statements to give a true and fair view in accordance with applicable accounting standards as properties are included in

the Financial Statements at their open market value. Depreciation is only one of the many factors reflected in the annual valuation

the valuers cannot

of the properties and the amount attributed to this factor by

reasonably be separately quantified.

,..-o-':.;--_-'_'---~.:.._-;=..~_:=..~=-.:=,.=_-.;::"_=c-"'.:=.=~=,_:._',?~=;.::,=.=,:~.~,._=.==="'..:.:c'_'_~.,::_''_'_è_::_,."'~~_:,..,,:=~=:==''=c."0=': _.::_-.~_.:~ ~;:.-__O..=c:'==,,~.:=::___::==~__::__":::==="_ :.=-=--~:-_=-:_":--=-::::o:_-~=-_:::.~:c__=_:=-.

Acquisitions and disposals of land and buildings are accounted for on the date

of legal completion. (4) . Fixed Assets-=OtliefTäl1gi6IeASsets

Tangible Fixed Assets are valued at depreciated historic cost, which is not materially different from depreciated replacement cost. UJ

(5)

Intangible Assets

(.'.

Õ L

Intangible Operating Assets consisting of softare licences are valued at amortised historic cost, which is not materially different from amortised

replacement cost.

t-~', ,.,-

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(6) Development Assets

Development Assets, consisting of land and buildings, are shown at the lower of current replacement cost and net realisable value, any reductions in holding value being written off to the Income and Expenditure Account.

Acquisitions and disposals of Development Assets are accounted for on the date of legal completion, (7) Depreciation and Amortisation

Depreciation and Amortisation is provided to write off the replacement cost of tangible fixed assets over their anticipated useful lives on a straight line basis

at the following annual rates:

3 years

Softare licences

3 years

Computer equipment

5 years

Owned property Leasehold buildings with less than 25 years to run Office furniture, fittings and equipment

50 years Period of lease

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

1 ACCOUNTING POLICIES (CONTINUED) (8) Investments and Long Term Loans

Investments and loans are shown net of provision for amounts considered doubtful and of write-offs for amounts considered irrecoverable. Provision has been made for all loans where recovery appears doubtfuL. No loan is written off until the impossibility of recovery is beyond doubt. Approvàl from the DTI is obtained for any write-off in excess of £250,000,

Partnership workspace schemes, the Agency's investment with partners, mainly local authorities, to provide rural workspace has been disclosed in the

future

Balance Sheet at a valuation based on the present value

of estirnated - ,.---------~c~~~~~C"Cfëntal=lncori'e~="'~Expenâìfùreccorr=tiEfse- proJects=I~; 'wríftenofrii1-ffie Vear--of'c-'

spend. - (9) Pension-Costs

Certain of the employees of the Northwest Development Agency participate in

the Principal Civil Service Pension Scheme (PCSPS) and the English Partnerships Pension Scheme (EPPS). The PCSPS and EPPS are defined benefit schemes. The Northwest Development Agency recognises the

expected cost of providing pensions on a systematic and rational basis over the period during which it benefits from employee's services by payment to the scheme of amounts calculated on an accruing basis. Liability for payment of future benefits is a charge on the scheme

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(10) Government Grants

Northwest Development Agency's activities are funded primarily by Grant-in-

Aid provided by the Department of Trade and Industry for specified types of expenditure. Government Grants receivable of a revenue nature are credited to the Income and Expenditure Account in the year to which they relate. Government Grants

in respect of capital expenditure are credited to the

Government Grant Reserve and released to the Income and Expenditure Account either, over the expected useful life of the asset, for assets that are depreciated or, upon disposal or loss in value, for assets that are not

depreciated. (11) European Grants

Northwest Development Agency's activities are funded in part by European

Funding for specified types of expenditure. European Funding Grants receivable of a revenue nature are credited to the Income and Expenditure Account in the year to which they relate. European Funding Grants in respect of capital expenditure are credited to the Deferred European Funding Reserve

and released to the Income and Expenditure Account either, over the expected useful life of the asset, for assets that are depreciated or, upon disposal or loss in value, for assets that are not depreciated.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

1 ACCOUNTING POLICIES (CONTINUED) (12) Deferred Taxation

Full provision has been made for deferred tax assets and liabilities arising from timing differences between the recognition of gains and losses in the Financial Statements and their recognition in the tax computation, (13) Foreign Currency Transactions

Transactions in foreign currencies are recorded in sterling at the rates

c~~=~~==~=~='pFeVaiIItfgãtttfè~âafeõrttãrisacfirCc'R'eSUltirfgexcnangegaìfis=andTõ~ssesaré--~~-"--- ~..- --- ~ taken to the Income and Expenditure Account. (14) Leases

Operating lease rentals are charged to the Income and Expenditure Account

over,the period of the lease.

There are no finance leases, o~.

Q"'~'. &'_Ý~~ .A ~_ ~"

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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH

2004 (Continued)

2 ANALYSIS OF TOTAL GRANT UTILISED In 2003/04, the Agency was funded by Grant-in-Aid from the Department of Trade and Industry,

Grant-in-Aid received from DTI

265,000

295,000

2003 £'000

2004 £'000 Grant-in-Aid allocation for Regional Aggregation Board

394

Coalfield grant received European grants received ~""~SI3S-gr¡rrits-~fe'celved - - - -- - - - - - - - - - - -

3,445

33,143

1,244 "2T,53"a-C ,

Other grants received

1,000

Grants applied to inherited liabilities

9,980 (1,355)

OpenirÎg2002/2b03 nètgrànt debtor

(2,841) 13,708

Closing 2002/2003 net grant debtor

(4,022)

Closing 2003/2004 net grant creditor

(13,708)

Opening 2003/2004 net grant debtor

(24,430) 287,957

(37,537) 334,589

Less non-grant income

312,387

372,126 '

Total relevant expenditure

287,957

334,589

Net Grant receivable

Total grant utilised Regional Aggregation Board loan

Q~ ~.-..-.~i L.. '. ,l -c

-;-: ~

, - ..- ._-"~;;

Z'-;;~7 , ---', z

394

(378)

1,418

232,526

263,625

1,057

4,319

37,769

31,379

2,276

4,369

Total grant applied to Investment Asset additions

1,133

1,945

Total grant applied to Operational Asset additions

Total grant applied to Development Asset additions Total grant applied to Investment additions Grant in Aid credited to Income & Expenditure Account Coalfield grant credited to Income & Expenditure

Account European grants credited to Income &

Expenditure

7,281

Account

3,589

287,957

334,589

9,985

1,000

Other grants credited to Income & Expenditure Account

18,859

SBS grants credited to Income & Expenditure Account

Total grant utilsed

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

3 ANALYSIS OF INCOME AND EXPENDITURE BY KEY DRIVER

2004 £000

Expenditure Accqunt

Expenditure Account

recorded in Income &

Total Expenditure

Total Income

2003 £000

European Reserve 2004 £000

Grant Reserve

Expenditure Account

Government

recorded in Income &

Total Expenditure

Total Income

Grant applied to capital Additions recorded in Grant &

,c,$usinessd- ,

Development Regeneration

Grant applied

to capital additions recorded in

Government

' , , , ':¡

93-910 - - --- - 93'9-nr==-~=~~- f5~2~Z3'=~==-='57=993' -- --- '5T9-g3~'- - ,.,~

-1,'424----

4,927

5,319

4,536

12,384

6,149

12,731

Infrastructure

7,414

10,926

Skills

35,081

194,883

18,653

197,490

Investing in Image &

Environment Administration Coalfields

34,071

2,816

34,916 2,816

.,P"; ~: oi b ~

1,477

436

. ~'

21,943

22,155

1,945

~~~ t:

Speke Garston

Developments

N/A

3,882

N/A

Ltd

Total

357,263

358,108

42,406

305,115

10,781,

311,802

42,235

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

INTEREST RECEIVABLE 2004 £'000

Corporation Tax Interest Bank deposit

Rural loan interest

29 846

741

807

2003 £'000 76

833

SALARIES AND WAGES 2004 £'000

2003 £'000

Board Members Board members salaries

Pension costs Socia I secu ritycosts

188

219

191 13 15

168 9

Staff Salaries and wages inc. overtime

Pension costs Social security costs Recruitment agency'staff Seconded staff salary costs

Total Salaries & Wages

190

527 1,438

422

911

8,190 1,200 594 9,984

10,207 1,332 932 12,471

." ;~_ ':. , .. lW. Q" "...1;,," - ~1 e

~:~ '~1~

612.

14,128

10,784

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

7 (b) Emoluments of Board Members The emoluments of Board Members were:

Name

Period of Appointment From

Sryan Gray

01/04/02 - 31/03/05

Salary £

73,314

Pension

Total

2004

Total

14/12/01 - 13/12/04

15,550

2003

13,563

86,877

56,642

(Chairman)

Professor Sir Martin

Harris John Dunning

15,550

14,871

14/12/98-13/12/01 7775 - 7775 7604

14/12/01 -13/12/04 ' "

c,~,_~~,,=, "'--~~'--"""FZclfL6'elS'er===='1411'Z198~'~l3rT2í(lf====~~~cc,=~~c~_c=__-c,"=~''''=c_=''==o,'c=,,'~,,'=''~=~c'C,=_ - --~_ _ _ ~_ ___

. 14/12/01 - 13/12/04 7,775 - 7,775 7,604

Dennis Mendoros 14/12/98 ~ 13/12/01 14/12/01 -13/12/04 14/12/01-13/12/04' ,

Neville Chamberlain

Anil Kumar Ruia

14/12/02 -13/12/05

Maureen Wiliams

14/12/01 14/12/01 14/12/01 14/12/01 14/12/02

Marie Rimmer

Srenda Smith Mike Storey

Dr Pauleen Lane

,Robert Johnston

13/12/04 13/12/04 13/12/04 13/12/04 13/12/05

14/12/02 - 13/12/05

Clive Jeanes*

14/12/98 - 13/12/01 14/12/01 - 13/12/03

Alan Manning*

7604~~~ i ',L z.

5,482

2,252 ',;.'i ê

~7,604

7,775 7,775 7,775 7,775 7,775 7,775 7,775 7,775

7,775 7,775 7,775 7,775 7,775 7,775 7,775

£7,775

7,604

7,775

7,604 7,604 7,604 7,604

, '-'

2250-: 1; 225'" r ¿" , '-ç

14/12/98 - 13/12/01

14/12/01-13/12/03 Dave McCall Joe Dwek

14/12/03 - 13/12/06

14/12/03 -13/12/06 14/12/98 -13/12/01 14/12/01 -13/12/02 14/12/98 -13/12/01 14/12/01 -13/12/02 14/12/98 -13/12/01

Mike Doyle

Kath Reade

Felicity Goodey

5,482 2,592 2,592

7,604~-- ~

11,406

5,703

14/12/01 - 13/12/02

5,703

* Retired December 2003

Name

Real increase in pension at 60

Bryan Gray (Chairman)

Total accrued

pension at 60 pension at 60 at at 31/3/04

31/3/03

598

1,833

1,218

NOTES TO THE FINANCIAL STATEIYENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

7 (b) Emoluments of Board Members (Continued) The net salaries of Professor Sir Martin Harris, Anil Kumar Ruia and Dr Pauleen Lane have been paid directly to their principal employer, at their request. As a consequence they receive no personal benefit from their remuneration as Board Members, behalf of the

Board Members are contracted to carry out two days work per month on

Agency, The Chairman is contracted for two days per week and the Deputy Chairman is contracted for one day per week. No Board Members are eligible for pension contributions, performance related payor any other Taxable benefit as a result of employment with the Agency, with the exception of the Chairman, who has a by-analogy pension aligned to PCSPS. ~---------_.- -:=""~=~~;"_-:';=-~.:=-C'=':=_::":'=::.="":,~":=:;::=--,::,~=~~,-~ c::=':.c_:-':::_::_:~..__ --"--~::..;:;:.,,,=,,c:..:'::::;~-''-"'-'.=:'.::"'=::."-_ ~.'':-C''':::=''::=--':_-'-:='-''_'::'-':_:'_::--_:'.''_~_-..C~:'

With the approval of DTI, a pension and death in service benefit scheme has been put in place for the Chairman Bryan Gray with contribution rates and pension benefits which are identical to the Principal Civil Service Pension Scheme but which is funded by the Agency, Onhisretiteh1ëht, paymehtòf the ChaÎÍ's pension ""il oeIhe directly

responsible of the Agency, underwritten by DTI,

The Agency is not permitted to invest its contributions of £13,563 and those deducted from the Chairmans salary of £3,044 and an equivalent pension benefit has therefore been provided for in the Balance Sheet.

.--~ ?j

Similar arrangements were made for the previous Chairman whose pension is met year on year from current resources.

Q.-..... ;.'. ~'. '.~. ..' '~.' t..:

.. .', ;~:

~.~~

7 (c) Emoluments of Chief Executive and the Most Senior Managers ;¿.-:v~ ~Z .' .' . rÆ f~:

, During the financial year the Agency appointed a new Chief Executive who is the Accounting Officer, As a result a restructuring exercise was undertaken around the Senior Management Team and a number of Executive Directors were appointed. This transition has resulted in more individuals appearing on the list for 2003/04 as previous post holders and new post holders are shown for their respective periods of office,

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

7 (c) Emoluments of Chief Executive and the Most Senior Managers (Continued) Name

Salary for relevant period

Bonus Benefits Pension RedundContribu- ancy

tions

Steven Broomhead

Chief Executive Appointed 28-04-03 (Designate) Chief Executive Appointed 01-08-03

106,744

5,774

19,748

2004 Total

2003 Total

132,266

MichaelShields, CBE Chief Executive Appointed 14-12-98

"-"~DeparteCIt3t203~=,"=~-"~~~~,,c~,,,8,1'rรก7,,7=c,,=,~~18i:I92""."icc." "",~""c",=~,1.รกl092..,.", ~,'".~~.~~~-"=~1.,'1,5l46,1",.=,-12-1"r2~1"S.,c'=",,_, . Steve Ashcroft

Director of Corporate

Services Appointed 01-09-99 Departed 31-12-03

62,719

7,050

11,223

48,764 129,756

67,530

John Burrows, OBE Director of Business

Development Appointed 01-04-99 Departed 31-03-04

89,709

8,462

5,629

16,596

120,396

101,g, ',' ", &: 1.::

Peter Mearns 1

0, d'-

Director of Marketing Appointed 16-08-99

"~'ยก is

18,209

2,428

4,634

14,484

39,755

67,~, d~

Baron Isherwood2

.' %;

Director of Regeneration Appointed 19-07-99 Departed 31-12~03

, 1-.

.'_. '7' ~:-"'~

,- - - -. ~.::

96,603

Geoff Parker3

Director of Corporate

Resources Appointed 19-07-99

-5

98,964

Dr Peter White 1

Director of Strategy

Appointed 01-08-99

25,493

2,837

6,301

16,537

51,168 100,558

lan Haythornthwaite4

Acting Executive Director of

Corporate Resources

Effective Date 17-02-04

1,000

Helen France Executive Director of

Development and Partnerships Appointed 29-09-03

45,457

, 3,418

8,375

57,250

Alan Turley Executive Director of Enterprise and Innovation Appointed 01-12-03

28,333

949

5,242

34,524

B.ernice Law

Executive Director of

Operations Appointed 10-12-03

28,973

275

5,360

34,608

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued) 1 Ceased to hold position of Most Senior Manager on 01-08-03 2 Ceased employment on 31-12-03

3 Ceased to hold position of Executive Director on 16-02-04 4 Seconded from University of Central Lancashire 5 Directors did not consent to disclosure of information

Salary

Performance pay for the Chief Executive is determined by the Board on the recommendation of the Remuneration Committee, Performance is measured against

seven separately weighted targets determined by the Board and agreed by the Secretary of State for Trade and Industry and the amount of the performance award can be up to a maximum of 20% of salary, In 2003/04 targets related to Programme i--" __~=~=c=l)eli'lery, the ß~'li~'J, of the _ RegjoriatJ;c.9.n9riiçStrate9ï=~tm:tjb~JQ.tælf!J!lorUlfjhe===~=c_="

Single Financial Framework, review and implementation of a new organisational

structure and production of a corporate financial strategy. Performance pay of the Senior Executive on advice from the

Management Team is determinedpy the.. Chief Remuneration Committee. Performance

is measured

against detailed annual targets set individually for each employee by the Chief Executive and the amount of the performance award can be up to 10% of salary, Benefits include cars, within an agreed car lease scheme ~,

., ~g 0-.,..

- A"

~' 2;

~-,..,.~

~ _,J

. ~ ~'. --1:

~ - z.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

7 (c) Emoluments of Chief Executive and the Most Senior Managers

(continued)

The Chief Executive and Senior Management have given their consent to show their pension benefit details,

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

7 (c) Emoluments of Chi,ef Executive and the Most Senior Managers (continued) Columns 2 and 3 of the above table show the member's cash equivalent transfer value (CETV) accrued at the beginning .and the end of the reporting period. Column 8 reflects the increase in CETV effectively funded by the employer, It takes account

of the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and

end. of the period,

A' CETV is the actuarially assessed capitalised value of the pension schemes time: '.' The benefits valuedare -,c~~~if1ernel1l3ets-aCèruéâ1ënefits 'anèJ - any colït¡nge"ntsp6us-Ets~peiï-si(in~-piiya61ë-frorrtc=~~c=oe e~~ benefitsascrued by a member at a particular point in

the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in the former

scheme, The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service

in a senior capacity to which disclosure applies, The CETV figures, and from 2003/04 the other pensions details, include the value of any pension benefit in another scheme or arrangement, which the individual has transfer payment commensurate to the additional pension liabilities being assumed, They also include any additional pension benefit accrued to the member as a result of their purchasing

additional years of pension service in the scheme at their own cost. CETV's are

r¿

Q, Q'..A~ ~r":cc: l-~:¿ "' "-

. ~ calculated within the guidelines and framework prescribed by the Institute and ~.."..'.~ ;z,

Faculty of Actuaries.

Pension benefits are provided through the Principal Civil Service Classic Pension Scheme. This is a statutory scheme that provides benefits on a final salary basis at a normal retirement age of 60. Benefits accrue at the 'rate of 1/80th of pensionable salary for each year of service. In addition a lump sum equivalent to 3 years' pension

is payable on retirement. Members pay contributions of 1,5% of pensionable earnings. Pensions increase in payment in line with the Retail Price Index. On death, pensions are payable to the surviving spouse at a rate of half the member's

pension. On death in service, the scheme pays a lump sum benefit of twice pensionable pay and also provides a service enhancement on computing the

spouse's pension. 'The enhancement depends on length of service and cannot exceed 10 years.

T_==~==C~:-="===::;O_~~"'~;c_",=~"7.~~---.,=_ ';",~=--:~~=~_=7."7'''~.'::;==Z.=======.-_--====--====-=..--=~---===~--~--==_

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

Pension 7 (d) Pension Arrangements The Agency has a number of pension schemes in operation. The principal schemes are of the contributory defined benefit type.

(i) Principal Civil Service Pension Scheme (PCSPS)

The PCSPS is an unfunded multi-employer defined benefit scheme but Northwest Development Agency is unable to identify its share of the underlying assets and liabilities. A full actuarial valuation was carried out at 31 March 2003. Details can be . föund.....lrthe=creSUtlfC~e--.acêUtrrits-.öf---the-eaDiftet=e)fiCe~ '.... ceivil=SuJJerann(rãtiblí=====~="~==

(ww.civilservice-pensions,gov.uk). For 2003/04, employer's contributions of £1,236,091 were payable to the PCSPS 18.5per cent of pensionable pay, based on salary bands. Rates will remain the same next year, subject to revalorisation of the salary bands. Employer contributions are to be (2002/03: £948;541 )at one

four

rates in the. range 12 to

reviewed every four years following a full scheme valuation by the Government Actuary. The contribution rates reflect benefits as they are accrued, not when the costs are actually incurred, and reflect past experience of the scheme.

From 1 October 2002, civil servants may be in one of three statutory based "final salary" defined benefit schemes (classic, premium and classic plus), The schemes are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium and classic plus are increased annl.ally in line with changes in the Retail Prices Index, New entrants from 1 October 2002 may choose between membership of premium or joining a good quality "money purchase"

Q,g 5

~ê ~.;: ~""',.J:;

, ~

.- , z ~~'~

=: - / ,- -.__ re ~:

stakeholder arrangement with a significant employer eontribution (partnership pension account).

Employee contributions are set at the rate of 1,5% of pensionable earnings for

accrue at the rate of 1/8Oth of pensionable salary for each year of serVice, In addition, a lump sum classic and 3.5% for premium and classic plus, Benefits in classic

equivalent to three years' pension is payable on retirement. For premium, benefits accrue at the rate of 1/6Oth of final pensionable earnings for each year of service. is no automatic lump sum (but members may give up (commute) Unlike classic, there

some of their pension to provide a lump sum). Classic plus is essentially a variation of premium, but with benefits in respect of service before 1 October 2002 calculated

broadly as per classic.

Classic Scheme Benefits accrue at the rate of 1/8Oth of pensionable salary for each year of service. In addition, a lump sum equivalent to three years' pension is payable on retirement.

Members pay contributions of 1.5 per cent of pensionable earnings. On death, pensions are payable to the surviving spouse at a rate of half the member's pension. On death in service, the scheme pays a lump sum benefit of twice pensionable pay also provides a service enhancement on computing the spouse's pension, The

and

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

7 (d) Pension Arrangements (Continued) enhancement depends on length of service and cannot exceed 10 years, Medical, retirement is possible in the event of serious ill health, In this case, pensions are

brought into payment immediately without actuarial reduction and with service enhanced as for widow(er) pensions.

Premium Scheme

Benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service, Unlike classic, there is no automatic lump sum, but members may commute lump sum up to a maximum of 3/80ths of final some of their pension to provide a

.pensionaDle earn Ings"fOr=eaclr-yearof seiViC-e-oTZ2'5=times ....perlsloncìrgreater=(tIeC"=~""="=="~ commutation rate is £12 of lump sum for each £1 of pension given up). For the

purposes of pension disclosure the tables assume maximum commutation.

Members pay contributions of 3,5 per cent of pensionable earnings, On death, pensions are payabie tothe surviVing spouse or eligible partner atarate of 3J8thstne member's pension (before any commutation), On death in service, the scheme pays a lump-sum benefit of three times pensionable earnings and also provides a service enhancement on computing the spouse's pension. The enhancement depends on length of service and cannot exceed 10 years. Medical retirement is possible in the ¡- ..'~ event of serious ill health. In this case, pensions are brought into payment '~'.. -..0 immediately without actuarial reduction, Where the member's ill health is such that it , ..'.,'~~

permanently prevents them undertaking any gainful employment, service is

a-. ~-l;:;.

enhanced to what they would have accrued at age 60. . z.

,~ . ~.. '"

Classic Plus Scheme

=-., z

~~, -....'; "-;'.~¿

This is essentially a variation of premium, but with benefits in respect of service before 1 October 2002 calculated broadly as per classic.

Pensions payable under classic, pre'mium, and classic plus are increased in line with the Retail Prices Index.

The partnership pension account is a stakeholder pension arrangement. The employer makes a basic contribution of between 3% and 12,5% (depending on age of the member) into a stakeholder pension product chosen by the employee, The employee does not have to contribute but where they do make contributions, the employer wil match these up to a limit of 3% of pensionable salary (in addition to the employer's basic contribution). Employers also contribute a further 0,8% of

pensionable salary to cover the cost of centrally provided risk benefit cover (death in service and ill health retirernent). Further details about the CSP arrangements can be found at the website

ww.civilservice-pensions.gov.uk (ii) English Partnerships Pension Scheme

The EPPS is a multi-employer defined benefit scheme but the Northwest Development Agency is unable to identify its share of underlying net assets and

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

7 (d) Pension Arrangements (Continued) liabilities. A full actuarial valuation was carried out at 31 March 2002 the last one and

more details can be found in the separate scheme statement of the EPPS. For 2003/2004, normal employer contributions of £115,770 were payable to the EPPS (2002/2003: £245,966) at the rate of 14.5% (2002/2003: 10.375%) of pensionable salary. It has been agreed that contributions will be reviewed on an annual basis following a scheme valuation by the scheme actuary. The contribution rates reflect they reflect past experience of the scheme, At the balance sheet date there were no benefits as they are accrued, not when the costs are actually incurred, and

outstanding or prepaid contributions to the scheme. '.. . ....... TheacspunI§()fthe_EQgltsJ.iPartDeESbips,P:EÐSiQQ"§çb.elTeêJeaVai1ab1e. frQrDíhe ',-~. "'..S~ciettÍ'~àt=sft3Efdtgeig"Otfs"e;'" Kih"9SWay~~-'iearrrvaliey, -rraresne~rd~~cNE'T1=~Or-A~'~~~~=~~=~--

All employees in the scheme are issued with a summary of the accounts.

7 (e) Staffing Numbers

The increase in staff numbers reflects new areas of activity for the Agency. These include delivery of Regional Selective Assistance and Enterprise Grant Scheme, joint pilot for the Alliance for Skils and Productivity, the re-profiling of tourism within the region as well as bringing in house various services such as

IT support and

accounting services.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

7 (f) Seconded Staff Staff were seconded from thefo/lowing organisations to the Agency during the accounting period.

2004 No. of Cost staff £'000

Organisation

2003 No. of Cost staff £'000

DfES 1 55 rJT1__,,_ _ 1 _ ,. _~4

Office of the Deputy Prime Minister 4 123

Government Office North West 1 73

~"----~~~~"~=té'arfltÎlg~'i:rtítFSKittS'''etfi:riTci'r=''==''=="===",====_c=="='-'=='""~'=1"=~,~,,_e_=3'Occ=,===c=c_e=..c-:_"=c,_,,

Birkenhead and Wallasey NHS Trust 1 25

Manchester Enterprises 2 24 Business Link for Greater Merseyside 1 22 and Commonwealth Office 1 21

South West of England RDA 1 19 Cumbria Board Liverpool Tourist City Council 11 1519 1 Foreign

North West Tourist Board 1 15 Lancaster County Council 1 14 British Trade International 1 11

24 w. -/ ,. ,(...

Business Services (East Lancashire) Ltd 1 9 Environment Agency 1 8 Salford City Council 1 7 Chamber Business Enterprise 1 2 1 Pricewaterhouse Coopers 1 2 1

University of Central Lancashire 1 1 Manchester City Council - _ 1

a.:-' 9i ~-'" ~~,"";¿

~' ;i ~?; '-

4 ,_.- ,- ~ 11

190

27 45 42

Greater Merseyside Enterprises - - 1 South Wirral Health Authority - - 1 Total

527

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (Continued)

8 OTHER ADMINISTRATION COSTS 2004 £'000

2003 £'000

Professional costs 21,633 14,057 Marketing and PR 7,114 4,872 Estate Management 4,095 4,471

Non-recoverable VAT 4,085 2,565 Office costs 2,315 1,876

, Operating lease rentals 1,481 1,171

~::.c_~..~~c.c::;~;€)tneps-ta~eests":'::':;;;':"_."."'.".......cc..c=c=======~==cc=c==.o==c=='f2-32~.===c=oc~.c;1~;5¥:...=........==.c=-_.._=~.=...-

IT and communication 1,11 ° 1,035 Travel & Subsistence 1,150 889 Depreciation and Amortisation 1 ,102 817

Contributions to Joint Ventures 392 356 remuneration 66 81

Auditors'

45,775 33,347 9 NOTIONAL COST OF CAPITAL

~ ,~t~

When calculating the surplus or deficit for the year, the Agency is required to include as expenditure, a notional cost of capital, to the extent that there is no real charge for

."'.. r' ~ b-'

this. This has been calculated as 3.5% (2002/2003: 6%) of the average of total assets less total liabilties. After the surplus or deficit for the year there is an entry reversing this amount.

10 TAXATION

2004 2003

£'000 £'000 Corporation Tax,on profits for the year at 30%

Adjustments relating to previous year

(5)

Deferred Tax provision

(12)

386 634 2,372 3,392

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (CONTINUED)

11 INTANGIBLE OPERATING ASSETS

Softare

Total

Licences £'000

Cost or valuation At 1 April 2003

£'000

122

At 31 March 2004

122

Additions in year

Amortisation L~_._~~_=c.'At1April2003_=

41 41 41 41 81 81

'...- .:.::..,:"~.'::':;;-'~':''.,::''2'''-'-''._::-_~~~~_':':':: ;_~':::=2.==:.:::.__:;.::.~:: _.:.____ _~_:._:~~..___ _ _~_.___~~._________~________

, Amortisation in year

At 31 March 2004 Net Book Value 31 March 2004 Net Book Value 31 March 2003

, \, . ti

Q'.. .~B

- ,,?

,. ¿ Q _ ___ N- :. i.

~~~"'-"","~ ~:,',

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (CONTINUED)

12 TANGIBLE OPERATING ASSETS fittings

occupied by the Agency

Fixtures &

Properties

£'000

Cost or Valuation At1 April 2003

1,108

Computers

Total

£'000

(60)

(42)

(18)

1,823

1,011

812

5,327

1,489

2,730

Additions in year

1,108

£'000

2,458

3,524

Disposals in year

At 31 March 2004

. ._-=.;;=.:..::--:--:...,~:._~::-'--.:.~:-.-=:. :..~.::..:~- -~=,::--.="";;:"":.==..::--:~-=~==---- ------~----_._-----_.__.,------,--

7,999

f~~~_C'~~=~.~.DepreCiallorÎM- .

At 1 April 2003

Depreciation and Amortisation in year

1,061

495

543

1,594

599

907

Disposals in year

1,020

Net Book Value 31 March 2003

4 , 4(QI1" P,; '" .,- ~,

1,406

2,088

997

Net Book Value 31 March 2004

2,599

(42) 1,052

(14) 1,436

111

At 31 March 2004

(56)

#"'1 -4 ;,' ~ 1,823

890

3,7~~-~..".,.":...: .~.;.

~ ;: i-

- - ~~. ~

The Net Book Value of Tangible Operating Assets does not differ materially from the depreciated replacement cost of the assets,

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (CONTINUED)

13 INVESTMENT ASSETS

At 1 April 2003

Additions in year

Disposals Surplus/(Deficit) on Revaluation ::Valuationat:31.Mar:ch.::

2004

(5,339) 463

(6,682) 1,402

87,374

86,867

85,098 2,276

82,498 4,369

2003 £'000

2004 £'000

---C,~,"=====,,=,~~:.:;~=8~tJi8,'Z:.~ ........ :~.:.:82.~9_8::::......-:::~::;;;:.::=-......:.:=::,::.'::.:.::

14 FIXED ASSET INVESTMENTS 2004 £'000

Cost

2003 £'000

.-. ~ :.:.

At 1 April 2003

4,979

Net Book Value at 31 March 2004

(397)

Provisions in year

1,057 4,319

Additions in year

" èì QH 'P'~ ~

1,057

ol'f' .." ~~':j '~l~

¡: /. .i IY l/ S S,~I4'/lJ""t-f r

fJog r .. tyy

!lrfrr

/ JJ() "-.

¿ 19"/0

Ø;vPe.// , 1\'\ '/, /t.E' 1\ :?pJ \ J ,(0

/J' ,,'-p

-v"'c./

Jo 'hi

/ r"r f2J

I! ' 9" 'Yr~:; l'

"",.

"-.

Sl07 ./ ; J-Jo

NOTES TO THE FINANCIAL STATEMENTS 2004 (CONTINUED)

FOR THE YEAR ENDED 31 MARCH

15 SUBSIDIARY UNDERTAKINGS Subsidiary Undertakings

Company Limited by guarantee

Estuary Management

Type of Organisation

Name of Undertaking

Company Limited

Nature of

Business

Provision of

Company Limited by Guarantee

Interest

100%

services at the Estuary Commerce

~--- ------~-----~----~ Park RUral

Regeneration Cumbria

,-.,-.-..-._-, _.__. ~

Regeneration for

Amounts Amounts due from due to Subsidiary Subsidiary March 2004

March 2004

at 31

45,220

.~..c",~-_..o.~~~==~_o.",":;_..::.-;~.===_-;=====:.~-:..-C~..;. c:';~':;:-

81%

Furness and

Cumbria

Associated Undertkings

Limited by

Liverpool Land Development

guarantee

Limited

Regeneration of East Manchester

Limited by

Manchester

Company

New East

Business

Type of Organisation

Name of Undertaking

Guarantee

Company Limited

Nature of

Regeneration of Strategic

Interest

33%

Amounts Amounts due from due to Associate Associate March 2004

March 2004

at 31

.,. .-. . w.

'0 QQ ~.'A~ '-

~,~~ 'J ~__

. -' ~".-

21,769

33%

~, ,..,11

5,662

9,462

Investment areas in Liverpool

Guarantee

Business Park

Limited by

Brunswick

regeneration of

Guarantee

Urban

Limited by

Liverpool Vision Limited

33%

Liverpool

West Cumbria

20%

Guarantee

Regeneration of

Limited by

23,86%

Management of Brunswick business Park

Limited

Furness West Cumbria New Vision Limited trading as West

Lakes

Renaissance Maryport

Limited Liabiliy

Developments Limited

Management of the development of Maryport Harbour

20.4% ordinary shareholding 100%

Preference shareholding

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (CONTINUED)

15 SUBSIDIARY UNDERTAKINGS (CONTINUED) Joint Ventures

distribution of

Partnership

Aggregation Board

Procurement and

Limited Liability

Regional

Business

Type of Organisation

Name of Undertaking

, Umjted,__

Nature of

Interest

Amounts

March 2004

at 31

Venture

Amounts due to Joint

Joint

due from

50%

394,444

broadband,_

Renewables Company limited Development of 50%

Northwest Limited by Guarantee Initiatives for

renewable energy

The investment in Maryport Development Limited was provided for in full in 1999/2000 to

reflect the Northwest Development Agency's intention to withdraw from this

investment. The wind up and transfer of the roles and responsibilities requires primary legislation, which is in the Parliamentary cycle. Audited accounts were not available for the above companies for year ended 31 March 2004 and hence no turnover, net assets or profit and loss information is available.

In relation to each of the above associates, the Memorandum of Association of the above companies excluding New East Manchester Limited provides that the income and property of the company shall not be available for distribution by way of dividend or in any other way that amounts to a distribution of surplus. If the company is wound up or dissolved, any remaining property after all its debts and liabilities have been satisfied wil be transferred to a company or institution having similar objects to the members. As a result of these restrictions, the Agency has not accounted for any

,- . ~

Q:. ..Aê ö

~' ~ ~,.,~. '~ ~'-r;E

share of the financial results, total assets or total liabilities of the company at the year

end.

16 DEVELOPMENT ASSETS

(3,481)

(4,071)

41,368

31,379

Additions in year

60,911

67,330

At 1 April 2003

2003 £'000

2004 £'000

Disposals Amounts written down European Funded

(8,754)

Amounts written down GIA

Funded Valuation at 31 March 2004

67,330

77,612

(31,468)

(8,272)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (CONTINUED)

17 DEBTORS 2004 £'000

17 (a)

Amounts receivable within one year: Trade debtors Other debtors

12,832 560 1,063

Value Added Tax

Grant receivable in future year for expenditure incurred in current year European Regional Development

12,997

grants Rural Loans Prepayments

2003 £'000

7,889 6,666 1,001

32,835

36,466

77 74 2,055 1,139

111

6,143

after more

13,789

2003 £'000

2004 £'000

Corporation Tax

17 (b) Amounts receivable

than one year:

Regional Aggregation Board loan

394

Provision for doubtful loan

(394)

Total Debtors

36,466

32,835

18 CREDITORS: Amounts fallng due within one year

Trade creditors Other Taxes and social security Other creditors Coalfield creditor Deferred Income

31,432 256 2,609 303 5,538

42,490

2003 £'000

2004 £'000 302 1,448 -

Accruals

43,879

53,746

3,741

6,128 3,378

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (CONTINUED)

19 CREDITORS: Amounts fallng due after more than one year Deferred Income - European Capital Grants

2004 2003 £'000 £'000

At1 April 2003 Received during year Transferred from European

9,308 1,673

Funding Reserve

Amounts released to Income and Expenditure

(8,877)

31 March 2004

2,104

20 PROVISIONS FOR LIABILITIES AND CHARGES

2004 2003 £'000 £'000 Environmental Liabilty

':.

... -.' l:

:'.~7' ~...;¿E

550

~,:,~~:-,

650

31 March 2004

300

100

250

550

At 1 April 2003 Increase/(Decrease) in provision for year

Dilapidations At 1 April 2003 Provided during year 31 March 2004

326

224

584 (258)

326 (102)

;- t: Q''") ~A~

.. ,.& ;~-:

9 ",

Deferred Tax

3,248

3,239

Total Provisions for Liabilities and Charges

2,372 2,372

2,365

At 1 April 2003 Provision for year 31 March 2004

2,372 (7)

The provision for environmental liabilities represents known liabilities for cost on specific sites which currently have no market value.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (CONTINUED)

20 PROVISIONS FOR LIABILITIES AND CHARGES (CONTINUED) The major components of the provision for deferred Taxation which has been fully provided at a corporation Tax rate of 30% are as follows:

2004 2003 £'000 £'000 Accelerated capital allowances Short term timing differences

(56)

(14)

2,428

3,039

Tax losses

(660)

365 2,372

21 INCOME AND EXPENDITURE RESERVE

2004 2003 £'000 £'000 Group at 1 April 2003

4,824

(6,586)

Transferred from Speke Garston Developments Ltd on 1 April 2003

(2,503)

Agency at 1 April 2003

(7,327)

Adjustment from Group to Agency

13,82~ Q..... ,~ . r-

_?_:í~ ê

13,828 ~~~)

~'_...d_.'. is."'

Subsidiary undertaking

.' ,-

-- - z: ~'(

229

Surplus/(Deficit) for year

Balance at 31 March 2004

(9,089)

(9,233) 4,824

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (CONTINUED)

22 GOVERNMENT GRANT RESERVE 2004 £'000

135,357

150,821

Agency at 1 April 2003

2003 £'000 135,357

2004 £'000 146,226 4,595

Adjustment from Group to Agency

Group at 1 April 2003

Transferred from Speke Garston Developments Ltd on 1 April 2003

2003 £'000

9,341

Tangible Operating Assets Additions

1,823

Disposals Intangible Operating Assets Additons Amortisation Investment Assets Additions Disposals

1,113

(5)

122

(41)

4,369 (6,682) 1,402

Revaluations (to be written back)

(5,339)

(..'"

. - . ës

Q22,76;¡

Development Assets

Additions Disposals

'37. t c~y _ I F' ~:'ß~~ :"z

L", ," -'0

21,635 (4,071) (8,272)

Amounts written off

Fixed Asset Investments Additons

(562) (24,818)

2,646

Amounts written off Investments

(274) (100)

Environmental Provision (increase) Current Assets Provision for doubtful debt Amounts released to Income and

Expenditure Account

1,057 (300)

(394)

(19,498)

(31,829) (19,498)

Coalfield Assets Additions

(31,829)

436

Revaluations I nvestment Assets Regional Aggregation

463

Board loan

394 172,089

Balance at 31 March 2004

146,226

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (CONTINUED)

23 EUROPEAN FUNDING RESERVE

2004 2003 £'000 £'000 Balance at 1 April 2003

Funding received during the year

19,116

Interest received

Transferred to Deferred Income

(1,673)

Balance at 31 March 2004

'~'-~=-_~--:"'-''.~''-'-:_'-~--C~

17,471

24 RECONCILIATIONS OF NET CASHFLOW TO MOVEMENT IN NET FUNDS 2004 £'000 10,724 23,620 34,344

Net funds at 1 April 2003 Increase in cash for the period

Net Funds at 31 March 2004

6 Q,.._..'..'..,;...'.'.:..,

, .' "1 t;

~-Ji

25 OPERATING LEASES

$,tl ~j '- ~~ ., "-,"

As at 31 March 2004 the Agency had annual commitments under operating leases as follows:

2004

... 1 ~

£'000 £'000

£'000 . £'000

2003 Buildings Others

Buildings Others Leases expiring: - within one year - between one and five years - over five years

33 241

1,035 1,035

274

213

905

189

60 845

Rental costs of operating leases are charged to the Income and Expenditure Account

on a straight line basis over the term of the lease. Operating lease commitments over 5 years relate primarily to the Agency's Headquarters at Warrington. During 2004 the Agency

entered into 2 new rental leases.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (CONTINUED)

26 CONTINGENT LIABILITIES At 31 March 2004 there were no significant contingent liabilities (2003: nil),

27 COMMITMENTS

2004 2003

£'000 £'000 Expenditure authorised by the Board and contracted for at 31 March 2004 amounted to:

Capital

36,328

O._'~~=~~~~~_~_~~_~~c.~_~_~~:;;:~~"'':~;~':~~.-"~~c~~~~~~~:,_~~~~"~-._-_.~.:.;--.,~,~-"~~~~..:.:.~._~~_~._~_=~__.._~~~.c__no_~,~.____p_~~.,_~_~~__~_,,~,_o.~_~

~=~~28-~F1N'A'N'CrÄt:c INSTRUMENTS-

-'-:=~--=----~:=-=7-'-~---.==~-="'===.===~~~=.=;:-,-====:e.--::~~-::~=_=.:=:-==-.:~=

The Agency has no borrowings and relies primarily on departmental grants for

its cash requirements and is therefore not exposed to liquidity risks. It has no material deposits and all material assets and liabilities are denominated in sterling, so it is not exposed to interest rate risk or currency risk, Transactions entered into which result in debtors due after more than one year have a low

credit risk. c,'

,..

29 POST BALANCE SHEET EVENTS

Õ --- ",..'", ~

On 1 April 2004, the Agency acquired the assets and liabilities of the North ~1r':s West Tourist Board (NWTB) - which ceased to trade on the same day. The net liabilities transferred amounted to £648,447, which will be brought into account during 2004/05.

On 1 st April 2004 the administration of the Enterprise Grant Scheme and Small Case Regional Selective Assistance Schemes transferred from the Small Business Service to the RDA and became part of a new programme

entitled Selective Finance for Investment in England. The capital programme transferred amounts £2.75m in 2004/05, to be financed through additional

Grant in Aid, which wil also be provided to cover the administrative cost of delivering the programme (£151 k for 2004/05). 30 RELATED PARTY

TRANSACTIONS

The Northwest Development Agency is a Non-Departmental Public Body

sponsored by The Department of Trade and Industry (DTI). DTlis regarded as a related party with which, during the year, Northwest Development Agency has had a significant number of material transactions.

In addition, the Agency has had various material'transactions with other Government Departments and other central bodies. Most of these

transactions have been with English Partnerships (EP), and Small Business Service (SBS).

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2004 (CONTINUED)

30 RELATED PARTY TRANSACTIONS (CONTINUED)' Other Regional Development Agencies are also sponsored by the DTI and so are regarded as related parties. The Agency has had transactions with East of England Development Agency, East Midlands Development Agency, Advantage West Midlands, One North East, South East of England Development Agency, South West of England Development Agency

Yorkshire Forward in the year,

and

Board Members took no part in the discussions, which concerned organisations that Board Members have connections with, as reported on the --.~t --....__..~:~:-:..,-:---__.,.._..........~.......J~.eglste..:J1Me,mb~eIS.:JotIeSlS,.___-'.._______~__...,--.........-~~----.-."..--~......~.._~.,._~....___.__.__._..~..._,._.____,.,...,_:-.

"-"1 - '--~-~--...c~=..~c=~=,~_=.==~,c--,_=~=='c.~~=====_=~==~~=.=c~~.,=~=.c_.,,__,_=-"=__=_.=.,~,==.=_========_=.=~-=c===___

, During the year none of the Board Members, key management staff or other related parties has undertaken any material transactions with the Northwest Development Agency apart from those detailed on pages 60 and 61.

Related party transactions with subsidiary and associated undertakihgs are shown below. Amounts

due to and from are disclosed in note 15,

Connected Party-

Relationship

The Estuary Management Company Limited Subsidiary undertaking Rural Regeneration CĂšmbria Subsidiary undertaking New East Manchester Limited Associated undertaking Renewables Northwest Limited Associated undertaking Liverpool Land Development Company Associated Limited undertaking Liverpool Vision Limited Associated undertaking Brunswick Business Park Limited Associated undertaking Furness West Cumbria New Vision Limited - Associated trading as West Lakes Renaissance undertaking Maryport Developments Limited Associated undertaking

Total

value of

transaction, ÂŁ 208,243 764,812 2,277,591

..- .. w.

" .5

Q- Q

/ L.. 1 ~:~

~....:r0"'~t

L....- -;-~

,. _.' ..;: .. ..~: d it z.....d...~

100,762

1,330,412

563,899 -

356,371

95,058

Related Part Transactions

Name

Bryan Gray MBE, DL

Neville Chamberlain CBE

Board Member

Chairman

Cumbria Rural Enterprise Agency Limited

Enviﾃ経link North West University of Salford The Manufacturing Institute

The National Football Museum CBI North West Region Lancaster University

Year ended 31st March 2004 Connected Party

Board Member

Board Member J4B Plc

John Dunning

Voluntary Action Cumbria Cumbrian Tourist Board Joe Dwek CBE

Board Member

Lancaster University

Clive Jeanes OBE

New East Manchester Limited Excellence North West Manchester Metropolitan University Business Link North West

Trafford Metropolitan Borough Council

Board Member

Dr Pauleen Lane

Board Member

UMIST English Partnerships North West Regional Assembly Manchester Airport

Cllr Richard Leese CBE

New East Manchester Limited MIDAS Manchester Airport Manchester City Council Manchester Ship Canal

Board Member

Investment Fund Partners Ltd

Alan Manning

Board Member

North West Aerospace Allance University of Central Lancashire East Lancashire Partnership

Merseyside Special

Dennis G Mendoros OBE DL

Board Member

Marie Rimmer

St Helens Metropolitan Borough Council St Helens Chamber of Commerce

The Mersey Partnership The World of Glass (St Helens) Ltd

Position

Grant claims

Nature of transaction

112,842 32,500 1,624,393

Goods and services

ﾂ｣

value of

1,390,069 202,224 1,404,070

Grant claims

Director and Chairman

Council Member Director and Chairman

Chairman Co-opted Member General Council

Vice President

Board Member

Non-Executive Chairman

2,277,591 552,616 10,000 12,415,771 43,416

11,980 605,591 54,000 10,000 812,974

Grant claims

Goods and Services, Grant claims

Grant claims

Goods and services

Grant claims

Goods and services

Grant claims

Goods and services Goods and services

22,593

Grant claims

5,123,646 5,718 1,652,115 72,567

796,441 681,064 291,000

Grant claims

Goods and services

Grant claims

Goods and services, Grant Claims

Sponsorship

Grant claims

615,872 96,253 1,234,878 1,624,393

Goods and services

Pro Chancellor

Member

18,000

Goods and services

Trustee Chairman

Director

2,277,591 16,785 1,284,540 2,553,621 Deputy Chairman of Governors

Non-Executive Chairman

Employee Non-Executive Director

Member Shareholder Representative

Elected Member and Deputy Leader

Director Alternate Director

Shareholder Representative

Councilor Director and Shareholder

Member Chairman Board Member Board Member

Leader Leader Board Member Director

l\l\O Nr~T';ON!\t, /\~rDIT Cr:FiCE

AnĂl Kumar Ruia OBE

Brenda Smith

Cllr Mike Storey CBE

Maureen Williams

Board Member

Liverpool Vision

MIDAS Liverpool Vision University of Sa/ford Campus Ventures Manchester Airport Mancfiester Chamber of Commerce and Industry North West Vision North West Business Partnership

Manchester Chamber of Commerce and Industry MIDAS University of Salford The University of Manchester University of Manchester Careers Service North West Textile Network Limited North West Business Partnership Granada Television Limited

University of Manchester

Liverpool John Moores University

Liverpool Land and Development Company Liverpool City Council

The Mersey Partnership

Board Member

Professor Sir Martin Harris CBE, DL Board Member

President Director

Council! Finance Commitee Trustee Trustee Director Director Director Director Director Member Member Non-executive Director Director Member Director Director Director Director Councillor! Leader Visiting Professor of Sociology

(Governance) Director

t, .. ." '.,," ., 1\~"" i:,,'~',,' 0" . c,;,:l C~~'.\. .'. Nr\rICĂŹN/,L ,J1.JD~T OrrrCE

48,297

563,899 1,652,116 1,675,650 2,006,370

552,616 563,899 202,224 56,756 10,000 35,079 64,500 2,000

35,079 552,616 202,224 1,000 215,765 337,910 2,000 25,890

Goods and Services, Grant claims

Grant claims

Goods and services

Grant claims

Goods and services

Grant claims

Goods and services

Grant claims

Goods and services

Grant claims

39,167

NORTH WEST DEVELOPMENT AGENCY ACCOUNTS DIRECTION GIVEN BY THE SECRETARY OF STATE, WITH THE APPROVAL OF THE TREASURY, IN ACCORDANCE WITH SECTION 14(2) OF THE REGIONAL DEVELOPMENT AGENCIES ACT 1998

The annual accounts of North West Development Agency (hereinafter referred to as "the Agency") shall give a true and fair view of the income and expenditure and cash flows for the financial year, and the state of affairs as at the year end. Subject to this

requirement, the Agency shall prepare accounts for the financial year ended 31 March 2004 and subsequent financial years in accordance with: -c~=~-a~=ËxecCut¡viit=Non-Départmerital PLÏblic'. Bòdies. An~nuaT-- Repor(ancl Äccounts=c=~~===

Guidance 1 published by HM Treasury and as amended from time to time; b. Other guidance which the Treasury may issue from time to time in respect of accounts where the requirement is to give a true and fair view of the Financial

Statements; and c. Any specific disclosures required by the Secretary of State. except where agreed with the Treasury, in which case the exception shall be described in the notes to the accounts, ¡,

" \ Ô Qt!

~"'~=:;

This direction replaces that dated 26 March 2002.

. .. .~~ ~~'.""l:;

This direction shall be produced as an appendix to the annual accounts,

Signed by authority of the Secretary of State for Trade and Industry

, :.-

.~i~

A Grade 3 officer in the

...... ... ............ ... ... ... ...... ... ... .....

Department of Trade and Industry

10 March 2004

i http://www.hm-treasuiy.gov.uk/media/C693F/ACFDAD.pdf