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Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Contents Page Annual report Chairman's statement .......... ..... ... .... ............. ... ........ ........................................ .... ................ ......... .......... 2

Chief Executive's review..........................................................................................................................3

Summary of performance ........................................................................................................................ 5 Operating review.. ....... ............. ... .... ..................... ...... ...... ... ................. ........ ... ............ ...... ... ... ... ...... ........8 Governance....................................................................................................................... .................... 20

Environmental policy..............................................................................................................................27

Financial statements

Foreword................................................................................................................................................30 Statement of Internal Control.................................................................................................................35 Certificate of the Comptroller and Auditor General............................................................................... 38

Income and Expenditure account..........................................................................................................40 Statement of Total Recognised Gains and Losses ............................................................................... 41 Balance Sheet........ ......... ........... ................ ..................... ....... ......... ................ .......... ............... .............42

Cashflow Statement....... ........ .................... .... ......... ...... ..... ......... ... ....... ......... ...... ..... ........ .............. ... ....43 Notes to the financial statements. ........ .................................................. ............. ....... ...........................44

Accounts direction .................................................................................................................................72

Annual Report

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Chairman's statement England's Northwest has witnessed a period of sustained economic growth over the past three years. Evidence from a new economic baseline report points to a very positive overall

performance for the region. Employment growth, business start-ups and labour market performance are all much stronger in the Northwest than nationally.

I am proud of the Northwest Regional Development Agency's contribution to this positive change to our regional economy and you wil see many examples of that in this Annual Report and Financial Statements. In my second term as Chairman I will ensure that we continue this momentum as we review the Regional Economic Strategy (RES), and focus on activities which wil transform our economy.

The RDA's remit is becoming increasingly focussed on providing strategic leadership. We are continuing to work with the government on the development and implementation of new strategies which will provide future growth opportunities for our region.

An example of this is our collaborative working on The Northern Way Growth Strategy, which has tremendous potential to strengthen the knowledge base, encourage greater levels of innovation, and make a real difference to the economy of the North of England. However, a good strategy is meaningless without effective implementation and over the coming year we will be working hard with our Northern RDA counterparts to ensure we deliver on this.

Likewise, our focus on Sub-Regional Partnerships (SRPs) is helping to ensure that we develop robust local leadership and strong, evidence-based strategies and priorities, all of which are closely aligned with the development and delivery of strategic objectives within the

RES. With innovation a key route to competitiveness, the Agency is helping to develop and exploit the region's knowledge base. Two significant projects in this area are our investment into Daresbury International Science and Technology Park and the National Biomanufacturing Centre at Speke, both of which are helping to build on the region's scientific capability.

Relationships with the Higher and Further Education sector have also grown stronger, with the Agency using its influence to encourage universities to play a more significant role in the regional economy. In particular our support for the growth plans of the new University of

Manchester is helping to ensure that our businesses have a plentiful supply of skilled graduates, as well as developing an institution of national significance.

Lastly, we cannot forget the importance of promoting the best of the region's assets and the

excellent quality of life enjoyed by people and businesses in the Northwest. To strengthen our aim of developing the region's image, the Agency has now taken responsibility for the delivery of tourism in the region, to ensure that support is in place to drive forward a vibrant and sustainable future for the sector. There have been a significant number of achievements for the Agency over the past year.

Through sustained investment in our people and businesses, we wil continue to bring together businesses, government, the public sector and local communities to identify further opportunities to drive forward the sustainable economic development and regeneration of England's Northwest.

~~"'~~ Bryan Gray Chairman

8 July 2005

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Chief Executive's review 2004-5 has seen the agency continue to change to ensure that it is able to meet the requirements of new responsibilities for delivery and to provide strategic leadership. It has been a challenging but rewarding year, in which I have continued to prioritise the need to build capacity both internally and externally and to ensure that the Agency is able to focus its efforts on a smaller number of priorities for transformational change. This annual report includes a comprehensive update on the Agency's achievements in the year, but I would like to highlight the following: . Business Skills Northwest, launched in July 2004, wil deliver a cohesive and integrated

service linking business support with skils provision based on the demand from the regions businesses and ensuring that individuals have access to skils training that will directly help employabilty and development . Construction of the Daresbury international Science park was complete during the year

and the Cockcroft Institute, a world class accelerator science facilty is being established on the site.

. The Agency continued engagement with the sub regions to develop robust SRPs to reflect sub-regional priorities, faciltating the creation of a single SRP for Lancashire and supporting the development of sub regional strategies

. Through Project ACCESS, a UK and Regional Development Agency first, we are investing ÂŁ20m in Broadband infrastructure across Cumbria. Areas of the Northwest have now outstripped the national average for Broadband take up. . The Agency launched the first ever Air Services Development Fund to encourage airlines to invest in new routes, and support Northwest Airports to maximise capacity. . the Deputy Prime Minister announced new Urban Regeneration Companies for Blackpool

and Central Salford . five new tourist boards began creative programmes to boost visitor numbers and an

online booking system is now available for each sub region and linked with the nationally co-ordinated tourism network. . At Lancaster University the Agency faciltated the establishment of Infolab21, a world class Centre of Excellence for the research, development and commercialisation of

Information and Communication Technology.

. The Agency also began the review of the Regional Economic Strategy, which wil be

published in 2006. A detailed economic analysis of the region was prepared and discussed with a wide range of stakeholders through consultation.

In addition to the operational achievements, the Agency has also continued to improve on its

own internal management systems and performance. The second Strategic Investment Plan (covering the three years from April 2005 to March 2008) was published in January.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Chief Executive's review (continued) The Agency's risk management framework has been refreshed and linked to the internal Business Plan, which has been developed to ensure a clear link between risks and activities

is properly controlled. The Agency has also commenced a substantial project to enhance existing project management methodology through the Systems and Process Improvement

Programme ('SAPIP') initiative. This initiative involves staff from all areas of the Agency and aims to ensure the continuous improvement of the Agency's processes.

Following the hard work undertaken in the year, I am confident that the Agency is wellplaced to lead the economic regeneration of the North West. I would like to thank all of our partners, stakeholders, and staff for their continued dedication over the past year in helping us to achieve our targets.

~~~ Steven Sroomhead

8 July 2005

Chief Executive

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Summary of Performance Key achievements against Tier 3 milestones The following section provides an overview of the Agency's performance during 2004-5 against the Tier 3 milestones as determined by the DTI for assessing and comparing

Regional Development Agency performance. The Agency also publishes (as a separate document) an Annual Review of its achievements during the year. This provides a further analysis of progress made against the five priorities of the Regional Economic Strategy Business Development, Regeneration, Skills and Employment, Infrastructure, and Image. The Agency is extremely pleased to have once again achieved all of its Tier 3 targets. The achievement of the targets depends almost as much on the quality of advance forecasting, and the ability to take corrective action where necessary, as on delivery on the ground. The

performance is a testament to the improvements in the Agency's and its partner's performance management and monitoring arrangements, with the consequent improved quality of data included in the Agency's programme management system.

Core Milestones

1. Employment Opportunities

Target

Achieved

8,978

11,208

The total number of employment opportunities directly attibutable to RDA activity - taking new and safeguarded jobs together (excluding jobs created as a result of Foreign Direct Investment and RSA Grants). This demonstrates an excellent performance for the year with all targets against all five RES

priorities being exceeded. Actual performance was lower than the previous year but this was expected (and reflected in the target) due to the sharp decline in the Single Regeneration Budget ('SRB') programme.

2. Business Penormance

725

1,094

The total number of new businesses added to the regional economy as a direct result of RDA activites. The result represents a 48% improvement on 2003-4, with especially strong performance from regional and sub-regional Business Development programmes, including Business Skils Northwest.

3. Brownfield Land

344

357

The total number of hectares of land remediated to an acceptable condition and/or recycled into effective use as a direct result of RDA inputs and activites. This is an excellent performance with the Agency once again delivering over 30% of

ODPM's national brownfield land target. In addition, the Agency also exceeded the 2003-4 performance figure.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Summary of Penormance (continued) Key achievements against tier 3 milestones (continued) Target Achieved

4. Education and Skils

15,462

26,198

The total number of learning opportunites created as a direct result of RDA support.

The Agency has achieved a 36% improvement on the 2003-4 performance with a number of major skills programmes delivering substantial

learning outputs.

5. Investment benefiing deprived areas 208 238 The amount (ÂŁm) of private sector investment benefitng residents of the most deprived wards as a result of RDA funding and activity. Deprived wards are those wards within the bottom 20% of the Index of Multple Deprivation. Significant amounts of levered investment were reported by partners during the year. An 89% improvement on the 2003-4 performance has been achieved, reflecting the Agency's increased emphasis on levering private investment.

Supplementary Milestones

(a) Floorspace 112,308 179,447 the amount (sq m) of commercial or industrial floorspace buil or refurbished as a direct result of RDA investment.

The target was significantly exceeded due primarily to accelerated development activity at key Strategic Regional Sites. However performance was below that in 2003-4, in line with

expectations at the start of the year when the target was set. 9,220 6,455 (b) Businesses receiving specialist advice the number of businesses receiving face to face support or advice under a RDA funded business development programme, as specified in the Corporate Plan.

This represents an excellent performance with a number of regional and sub-regional Business Development programmes delivering high value, intensive advice and support to a

range of businesses across priority sectors. The performance is more than double that achieved in 2003-4.

1,820

8,913

the number of businesses receiving specific face to face support or advice in response to their skils / workforce development needs as a direct result of a RDA inteivention. The target was significantly exceeded, as was expected throughout the year, due primarily to the substantial expansion in this area of activity compared to prior years. The target was aligned to the 2003-4 out-turn (1,682).

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Summary of Performance (continued) Key achievements against tier 3 milestones (continued) Target Achieved

(d)

Woodland

141

186

Hectares of woodland or forestry created or expanded on what was previously derelict, under-used or neglected land through a RDA funded project.

The Agency has delivered an excellent performance in line with expectations throughout the year. The actual result represents a 20% improvement on the prior year's performance.

Regional Selective Assistance I Selective Financial Investment ('SFI')

(i) number of projects (grants offered) (ii) number of employment opportunities (expected jobs created or safeguarded) (iii) total value of grants less than ÂŁ2m disbursed

N/A

120

5,000

5,244

N/A

ÂŁ10.8m

The jobs target was achieved although out-turn was slightly down on the previous year

whilst the number of grant offers increased by 50%. This indicates a larger number of smaller (in jobs terms) projects, which reflects the new SFI scheme, which came into force on 1 April 2004.

Foreign Direct Investment (i) number of projects

(ii) number of employment opportunities (expected jobs created

N/A

2,000

37 7,970

or safeguarded)

As in previous years, the target was substantially exceeded with a significant level of activity in the final quarter of the year, due in part to some major successes in the final quarter.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Operating review In addition to the specific Tier 3 milestones for which the Agency is responsible, the Agency's activities also contribute to the wider Public Sector Achievement ('PSA') targets on which the DTI and other government departments are monitored. The following section explains some of the key features of the Agency's contribution to these measures.

1 . Sustainable economic performance

The region's published target is to achieve Gross Value Added ('GVA') per head of 91% of the UK average by 2006.

In December 2004, National Statistics published revised regional GVA data for the period 1998-2003. The position in 20031 is that GVA per head in the Northwest was 89.8% of the UK average.

The overall size of the economy increased from £92.2bn to £97.6bn, an increase of 5.8% compared with a UK increase of 4.9%. This represents 10.3% of the UK total and ranks the Northwest third after London and the South East. The growth rate was 0.9% higher than the rate of the South East and more than double the growth rate of London. The Northwest is characterised by wide disparities in GVA per head, ranging from Cheshire, which was 13% above the UK average in 2002 (latest year available for sub-regional data) to

Cumbria, which was 26% below, and Merseyside at 27% below. Between 1998 and 2002, growth in Greater Manchester, Cheshire and Merseyside was close to the UK average.

Lancashire grew slower whilst Cumbria grew the slowest of all Northwest sub-regions.

GVA per head increased from £13,599 to £14,346, an increase of 5.5%, compared with aUK increase of 4.6%.

GVA per head relative to the UK average increased from 89% to 89.8%. The Northwest's ranking remains 8th out of twelve UK regions.

Between 1990 and 2003, Northwest GVA grew at an average annual rate of 1.9%, below the

UK average of 2.3%. However, performance in the five years to 2003 improved with the gap in growth rates halving over this period. The Regional Economic Forecasting Panel's Long Term Report (March 2005) provides a forecast for growth in the Northwest economy of 2.2% a year between 2003 and 2022, compared to 2.5% a year in the UK. The Panel forecasts the

Northwest will rise to 90.6% of the UK but fall back to 90.1 % by 2006.

2 Regeneration As well managing the remaining SRB schemes and the implementation of successor regeneration schemes, the Agency has focussed on a number of strategic sub-regional and local initiatives such as: Sub-Regional Partnerships

During the year the Agency took a number of important steps to develop the Sub-Regional Partnership structures further, including facilitating the creation of a single SRP for

Lancashire, providing funding to each SRP to build its strategy/policy, performance management and project development capacity, and developing specific proposals for SRP arrangements to be piloted in Cumbria, which are currently subject to consultation.

i 2003 is the most recent year for which data is available.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Operating review (continued) 2 Regeneration (continued) Lancaster Vision

The Lancaster Vision Board began work in earnest during 2004-5 by considering the key economic assets of the Lancaster and Morecambe district and future opportunities for economic growth. It has agreed a 12 month action plan up until December 2005, which

includes establishing an evidence base for each of the key economic drivers identified for the district. Burnley Vision

The Burnley Vision Board was established in January 2005 to provide a greater private sector perspective on economic regeneration plans for Burnley, building on earlier visioning work commissioned with Agency support. The first priority wil be to oversee Burnley Town Centre m'asterplanning to maximise development opportunities in support of the town centre

economy. Preston Vision Preston Vision began developing the evidence base to support the economic regeneration

action plan for the city to build upon the ÂŁ500m private sector led retail/mixed use development planned for the city centre. Major progress was made on the strategy and its objectives and priorities for presentation in 2005/06. Cumbria Vision

Following the appointment of a Chairman and Chief Executive, the full Board, comprising a private and public sector mix, was confirmed at the end of May 2005. The first year Business

Plan is now being prepared. This new organisation wil provide strong leadership to the subregion and help secure the economic future of Cumbria by maximising public and private sector investment and influencing national and regional policy. Northwich Vision

There was significant progress in implementing the Northwich Vision. The process of filling the abandoned salt mines under the town centre began in January 2005 (scheduled for completion in 2007), work started on the refurbishment of a redundant building at the railway station to provide a community learning centre, a feasibility study for a new cultural centre is underway and the search for a private sector development partner for the prime Baron's Quay site has reached the short listing stage. Liverpool City Growth Strategy

The Board and Project Team have been created and a comprehensive survey of 1,000 businesses has been commissioned.

Over 5,000 jobs were created or safeguarded in regeneration priority areas as a result of the

Agency's regeneration programmes with over 400 new businesses started up and over ÂŁ200m private sector investment levered.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Operating review (continued) 3 Urban renaissance Significant progress was made in 2004-5 across a range of urban renaissance initiatives, including the following:

New East Manchester

A broad range" of projects "and programmes started and progressed on site including substantial progress on Central Park where remediation works have now been completed creating a development area of approximately 38 hectares. The first development comprising

14,000 sq. m of high quality offces for Fujitsu was completed. The One Central Park development, a project to provide learning opportunities for the local community and to serve

the employers at the business park, is now being delivered. This is due to complete in Autumn 2005. A £2.7m Economic Programme in East Manchester was approved which wil

fund business support projects across the regeneration area.

The Agency approved £5.3m of investment to match a £7.2m heritage grant award to carry out the full repair of the listed Murray's Mills complex in Ancoats. Murray's Mills is an integral

part of the Agency's Ancoats Urban Vilage initiative, which forms part of the East Manchester Regeneration Framework, and will provide new residential accommodation. Construction began on the £1.3m restoration of the former St Peter's Church in Ancoats Urban Village. Plans to construct a modern contemporary Thai restaurant were unveiled in December 2004. The 550-seat venue is part of a £10m development in East Manchester receiving £2m of funding support from the NWDA. New East Manchester commissioned B of the Bang, a landmark piece of public art, which forms a centrepiece for Sportcity and marks the success of the 2002 Commonwealth Games. The 184 feet tall landmark was inspired by Linford Christie, who famously started his gold medal winning Olympic 100 metres race 'on the B of the Bang'.

Liverpool Vision

The European Capital of Culture designation for 2008 is providing a new impetus for the delivery of many key projects. These include the £390m Kings Waterfront regeneration scheniein Liverpool,. which received planning consent and

NWDNEP funding approval.

Construction on the Paradise Street retail development, which will deliver the Tier 2 retail

target in Liverpool City Centre, started. The Fourth Grace project did not, however, go forward when the public sector partners concluded that the project was no longer viable because of increasing costs and fundamental changes from the original scheme. Following this decision a project to produce a worid class museum and mixed use scheme on Mann Island was developed. The Liverpool Waterfront was confirmed as a World Heritage Site by UNESCO following a bid for such status actively supported by NWDA, Liverpool Vision, Liverpool City Council and other partners. The NWDA approved a grant of £5m towards the Unity Development Project in Liverpool City Centre, a key development in the regeneration of Liverpool's business district. Other key areas of progress include the City Centre Movement Strategy and public realm improvements.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Operating review (continued) 3 Urban renaissance (continued) West Lakes Renaissance

2004-5 represented the first full year of this URC's operation. Achievements include the coordination of an integrated regeneration programme to create a new economy for Barrow in partnership with Barrow Task Force and the creation of a Nuclear Opportunities Team to market opportunities and develop the local supply chain. The Agency approved £2.7m of

investment in public realm works associated with the £35m Workington Town Centre

redevelopment. The project forms a critical element of a Regeneration Master Plan for Workington produced by local partners. Blackpool A new URC for Blackpool was announced by the Deputy Prime Minister in January 2005.

The URC Board, chaired by Sir Peter Hall, was established. The Blackpool Masterplan is complete and the URC Business Plan is close to completion. The NWDA contributed to two

early win projects which are completed or nearing completion - £2m for South Promenade public realm work and £7m for the Central Corridor Gateway public realml community park

improved transport commercial development scheme due for completion in June 2005. The Agency also set aside £5m for a programme of key acquisitions.

Central Salford

The Deputy Prime Minister also announced a new URC for Central Salford which wil lead and co-ordinate the redevelopment of Salford's central wards of Ordsall, Broughton, Irwell Riverside, Langworthy, Kersal, Claremont, Weaste and Seedley.

Housing Market Renewal

The Agency presented a draft Framework for NWDA Engagement in Housing Market Renewal to all four North West Housing Pathfinder Boards. The Framework outlines how the NWDA wil contribute to the Housing Market Renewal Programme in a range of areas

including linkages to regional policy, targeting investment and supporting cross-regional initiatives such as urban design. Examples of specific performance in each of the HMR areas are as follows: . Elevate - The Agency agreed in principle to support two key projects, Hyndburn Phoenix

and Darwen Academy, which will complement Housing Market Renewal activity in East

Lancashire. . Manchester Salford - The NWDA provided financial support for complementary economic

activity in East Manchester, via New East Manchester URC, gap-funding and other programmes totalling c£36m.

. Oldham Rochdale - The Partnership achieved investment of £17.2m of ODPM funding in accordance with its Annual Investment Plan, and NWDA provided financial support for complementary economic activity totalling £1 m in 2004-5. . New Heartlands - The Partnership delivered the full allocation of OD PM funding in 20045. The Agency is working closely with the partnership to align currenUfuture investment in Merseyside with emerging HMR priorities. 11

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Operating review (continued) 3 Urban renaissance (continued) Resort Action Plan for Morecambe This Action Plan was developed with Lancaster City Council in the context of the NW Coastal Strategy. An "early win" was the NWDA's agreement to provide ÂŁ4m of funding towards the

Urban Splash refurbishme.nt of the iconic. Midland Hotel to kick start wider mixed use development at the west end of Morecambe.

4 Rural renaissance The region's Rural Strategy, Rural Renaissance, is the policy context for delivering economic development and regeneration in rural communities. Progress during the year was as follows in the various communities is summarized below. The Cumbria Rural Regeneration Company

16 new projects were approved, including the flagship ÂŁ10m Farming Connect project to provide intensive business support to the agricultural sector. Other initiatives were also approved, such as Forest Futures, the Northern Reaches Feasibility Study, Cumbria Rural Infrastructure Support Programme and Junction 38 Meat Processing. The Agency endorsed

the Lake District Economic Futures study, which identifies how the Lake District can contribute to the economic regeneration of rural Cumbria in an environmentally sustainable way. This will form the basis of an action plan for the future.

The Lancashire Rural Partnership (LRPJ

The LRP supported a second wave of Market Towns, Colne, Kirkham, Darwen, Longridge and Poulton-le-Fylde, which completed Health Checks in October 2004. It also established a local food promotion, sourcing and business advice project being managed by Myerscough Rural Business Centre as well as a rural business facilitation service. A mid term evaluation

of the Lancashire Rural Recovery Action Plan wil take place in the summer of 2005. The Cheshire Rural Partnership

The Rurai Enterprise Gateway Business Centre, a one-stop shop for business advice in the

county, was approved in December 2004 and the Centre is open for business. Other bach, which secured funding to reconstruct and expand their offce premises leading to an additional 12 full time staff; and Brighouse Group Holdings Ltd which received support to convert redundant farm buildings

successes included: Workplace by Design, based in Sand

into new company headquarters. . The Sustainable Food and Farming Plan (SFFJ

The Northwest Food Allance, in conjunction with DEFRA, held two regional Public Procurement Seminars in March 2005, raising awareness of DEFRA's Public Sector Procurement Initiative and demonstrating what is available to support public sector

procurement of food. Other projects included a schools project with the production of an interactive learning package based on the principle of "from dairy cow to fridge". There has also been a successful Forward Farming Project and a regional' rural skils and training programme, managed by Myerscough College but implemented regionally. The Northwest Fantastic Foods programme has also been highly successfuL. The SFF project in the Northwest has received national praise for its activity.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Operating review (continued) 4 Rural renaissance (continued)

The Agency's rural programmes delivered the following outputs: 1,000 jobs created or safeguarded, 2,000 learning opportunities delivered and 250 business start ups completed.

5 Physical development The NWDA's role in the delivery of the Government's target for 60% of all new housing to be

on previously developed land (which the North West region consistently exceeds) is marginal although at a policy level the Agency has actively supported the development of the Regional

Spatial Strategy, which wil play an important role in future physical development activity. However, two specific projects progressed dunng the year are directly relevant to this objective: . Murray's Mils (Ancoats) - Details provided within the commentary for New East

Manchester under section 3 above. . Luneside, East Lancaster - NWDA agreed to contribute ÂŁ3.9m to the ÂŁ50m private sector led Luneside East mixed use development which wil provide housing on a severely contaminated brownfield site adjacent to the River Lune and close to Lancaster City Centre. EP are also providing funding. Across the region, the Agency's programmes recycled over 350ha of brownfield land for soft end use or for development, including housing.

6 Employment All of the Agency's activities described elsewhere in this report have a positive impact on employment, either in the short term (through investing in areas of need under urban and rural regeneration programmes) or the longer term where strategic economic development wil result in increased competitiveness and productivity sustaining employment into the

future. An additional specific NWDA initiative to support employment growth is the development of 25 strategic regional sites. In April 2004 the NWDA Board endorsed the deletion of Waterside Park, Tameside from the list of designated sites on the basis that the type of development now proposed was different in scale and location from the earlier Waterside Park proposal and was essentially of local and sub regional significance. Key achievements on the strategic regional sites include: . Central Park, Manchester - As reported in section 3 above, a new business vilage to be

occupied by Fujitsu has been completed and construction at One Central Park is underway. . Chester Business Park - Construction of the extension to MBNA's existing operations is

nearing completion. The four new linked offce buildings wil create up to 2,700 jobs. . Daresbury Park, Halton - Construction of the Daresbury International Science Park was

completed during the year. The Innovation Centre was opened for business and the Cockcroft Institute, a world class accelerator science facility, is being established within the Science Park. . Ditton, Widnes - Ditton Strategic Rail Freight Park proposals have been carried forward

into the adopted Halton Urban Development Programme ('UDP'). An application for full 13

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Operating review (continued) planning permission has been submitted proposing new distribution warehousing with associated road and rail access improvements.

6 Employment (continued)

路 Kingmoor, Carlisle - Over 90,000 sq.m of industrial/offce space is so far occupied on the site by approximately 150 companies employing over 1,400 people. . Kings Business Park, Knowsley - Computer Sciences Corporation (CSC) opened a new

office development creating over 100 new jobs with support from the NWDA. CSC is a leading global information technology services company.

. Kingsway, Rochdale - The Agency received CPO confirmation for this 170ha site and land preparation started to facilitate development. . Liverpool Science Park (Edge Lane) - Outline planning consent received for B1 and B2

uses as part of Liverpool Science Park bringing together the Liverpool Digital site, the former MTL site and part of the existing Wavertree Technology Park. At Liverpool Digital

the Agency completed the refurbishment of 10,000 sq.m of floorspace to enable early occupation by four companies. Site remediation works commenced at the NWDA owned MTL site with funding secured from EP. . Liverpool University Edge - The construction of two NWDA-supported developments adjacent to the Metropolitan Cathedral is approaching completion, creating new works

pace to accommodate high technology and knowledge-based businesses.

. Royal Ordnance Factory, Chorley - Planning permission granted for a mix of B2 and B8 uses, including full permission for the proposed 1.5km main service road for the site. Remediation of part of the site, to kick start development and support the relocation of a major local employer, was undertaken with support of 拢1.3m from the NWDA.

路 The Estuary, Liverpool (Speke/Garston) - The National Biomanufacturing Centre is

approaching completion on Plot 1. Arvato AG wil take a site on Plot 2 with its new gravure printing facilty, investing up to 拢120m and initially creating up to 500 highly skilled jobs.

. Westlakes, Whitehaven - Completion of the infrastructure on the 20 ha second phase of

the Park's expansion was achieved in July 2004. So far, the Park has attracted 39 businesses employing over 850 people.

As a direct consequence of NWDA investment, the Strategic Regional Sites programme delivered' 20ha of remediated brownfield land, 40,000 sq.m of industrial development and 400 jobs.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Operating review (continued)

7 Skils Specific initiatives and projects undertaken include: . The Lancaster Leadership Centre - The extension and refurbishment of the Lancaster

University Management Centre is now completed. This ÂŁ4.5m investment clearly

demonstrates the NWDA's commitment to addressing leadership and management

development in the region. . . The Northwest Enterprise Project - This is a joint project with Manchester Metropolitan University and Salford University to increase the capacity for schools to develop, promote

and engage in the regional enterprise agenda. It has now completed two years of the

three year funded programme and continues to meet objectives and exceed targets set

for this stage of its development. The only exception here relates to the Cumbria element, which has taken longer to get established due to the constraints placed upon schools travellng to suitable venues. So far 50 Enterprise Master classes have been delivered and the Action Enterprise Website has been accessed more than 45,000 times.

. 'Grow Your Future Workforce' - This project continues to exceed all expectations. The project now involves 132 teachers in 73 schools working with 4,527 students, compared to the original target by this stage of 5 teachers and 500 students. . Skil City Northwest - This international exhibition for skills and employment opportunities

was held in Manchester and attracted 35,000 visitors.

8 Productivity Productivity is driven by skils, enterprise, innovation, investment and competitiveness and achievements in these areas are described elsewhere in this report. However, there are a number of NWDA initiatives which are not covered elsewhere, as follows:

. Cluster Development Programme - The development of strong clusters around growth sectors is key to improving the region's economic performance and a number of other programmes, such as inward investment, innovation, business finance, and Business Skils Northwest, are aligned to this initiative. Of the 16 priority sectors in the region, 11 cluster programmes are now fully operationaL. The five remaining clusters have had their cluster strategy and action plans completed with specific activities taking place. The cluster networks continue to grow in scale and participation with active involvement of around 14,000 companies (500 more than last year) and more than 4 million hits on cluster websites. One of the Agency's flagship cluster supporting projects is the National

Biomanufacturing Centre and this ÂŁ35m project is expected to be completed at the end of 2005. The building provides both a regional and national facility for the research and development of the bio-pharmaceutical industry, complementing the Agency's Bio

Pharma Clustering Strategy on Merseyside. During the year the Agency terminated its contract with Digital Industries NW, who were heading the Digital Industries cluster, for contractual reasons. Across the Cluster Development Programme as a whole, 2,500 businesses received specialist advice and 1,200 jobs were created or safeguarded.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Operating review (continued) 8 Productivity (continued)

· Regional Business Advisers - This ERDF Objective 2 funded project provides a team of senior sector specialist advisers providing advice and support to SMEs. The project is a partnership between NWDA, UKTI, and Regional Cluster Organisations and is operating in the same growth sectors, managed through the Business Links. .During 2004-5, 528

SMEs received specialist advice.

· Air Services Development Fund - The Agency launched England's first ever such fund to attract new air services to the region.

· Manufacturing Advisory Service - The Manufacturing Institute (TMI) has completed its first 3-year contract to deliver the Manufacturing Advisory Service (MAS) and has exceeded its primary GVA target - £32m achieved against £12m target. On average each

client company has seen a 14% increase in GVA and a 9% increase in turnover. An independent evaluation of TMI and MAS found that TMl's delivery of MAS in the region has been highly effective. · Relationship Management - This is a key part of the NWDA Business Support Team's

activities, through which strategic partnerships have been proactively developed with c250 major companies from amongst the top 400 companies in the region. 2004-5 saw

the initiation of over 54 new projects including new capital equipment, surrounding infrastructure, relocation, training, expansions, rationalisation, supply chain, product development, recruitment and site refurbishment. · Supply Chain projects - Key project developments in 2004-5 included Nuclear

Decommissioning supply chain mapping, the NHS Supplier Bureau, and Heinz AD facility Food Waste Management. Additionally, as part of a national programme covering the Automotive Sector, in partnership with the DTI and all the RDAs, a two year programme was implemented at Leyland Trucks plc, with a similar project being scoped with Bentley Motors plc.

· UNIDO - 150 Northwest companies were assisted. The value of investment, joint ventures and subcontracting was over £30m.

integration of RSA/SFI support into wider NWDA business support activities, demonstrating a closer working relationship between the Inward Investment, Regeneration and Skills Teams within NWDA and relevant sector partners. In total 120 grants were offered, total value £25m,

· Selective Finance for Investment - The last year saw the further

which wil

lever £163m of investment and create or safeguard over 5,000 jobs.

· Lancashire Technology Management Centre - This major project was completed on a key gateway plot of the NWDA-owned Michelin site at Burnley. The Agency contributed £2m to the project, which will help kick start development of the wider site.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Operating review (continued) 9 Enterprise Enterprise objectives are embedded in regeneration programmes targeted on the economies of deprived urban and rural areas. An important tool to help stimulate enterprise is the portolio of business finance schemes put in place by the Agency. These also contribute to innovation and broader productivity objectives. Major activities and funding during the year included:

. North West Equity Fund - A significant increase in investment activity in 2004-5 under

new team leadership. 42 investments totalling £6.8m were made in 24 companies, doubling the investment rate in the first two years. NWEF also co-invested with each of the NWDA backed funds, providing follow on funds with companies in early stages and

funds for larger scale start ups.

. NW Business Investment Scheme - This £19.3m fund was the first ERDF Objective 2 Venture Fund in the UK. It is facilitated by NWDA. In 2004-5 the portolio grew from 9 to 20 companies ranging from early stage technology and renewable energy to major job creating businesses such as contract cleaning. Approximately £1.7m invested levered

£30.1 m of other funds with almost 500 jobs created or safeguarded.

. TEChlNVEST - Companies and investors registered with NWDA's TEChlNVEST service had a particularly busy year with 15 companies raising £1.4m and unlocking £5.9 m. North West funds have sourced their co-investments from a variety of sources including from TEChINVEST.

. Rising Stars Growth Fund - This NWDA financed fund grew its portolio from 17 to 28 companies in its third year, investing £2.5m of the £6.4m total invested. An additional £4.2m was also levered. This Fund focuses on very high potential technology start ups, including those at proof of concept stage. The biotechnology, softare, communications, and healthcare sectors are strongly represented. . Barrow and Furness Peninsula Task Force Enterprise Fund - The Agency made £3m

available to establish this fund to encourage start-ups in Furness following major redundancies in and around Barrow. Over 1,000 new business these

start upsweré created and sustained during the year. 40% of

were a direct consequence of regeneration programmes focussed on the region's most

deprived areas.

10 Investment The Agency achieved 37 foreign inward investments whilst reporting a further 50 from other sources in 2004-5. Investment by overseas-owned companies created 5,380 new jobs (an

increase of 70% on last year) and safeguarded 2,590 jobs. Total disclosed capital

expenditure by these companies reached almost £850m. Out of the 87 total inward investments, European owned companies have provided 45 investments with USA- and Canadian-owned companies accounting for 37. China has also made an impact on inward investment, providing 4% of all projects into the Northwest.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Operating review (continued) 10 Investment (continued) Major initiatives and programmes included: · Regional Partnerships - A European regional marketing plan was produced following

consultation with sub regional partners. Partnership working has increased with the .establishment of an inward investment forum for NWDA and sub regional partners. The forum discusses both inward investment and aftercare issues on a regular basis. This is leading to a more collaborative approach to both marketing activities and support on . projects. · North of England - The collaboration with Yorkshire Forward and One North East

continued in the USA and Australia. The US operation has exceeded targets and has produced 15 successes in 2004-5. Of these, six have located in the Northwest. The North of England operation in Japan is a collaboration between Yorkshire Forward and NWDA.

The offce achieved three successful investments into the North of England, with one locating in the Northwest. The Australian collaboration produced eight successes in 20045, and is on schedule for its three year target of 15-20 successful investments. Of the

eight, the Northwest won three projects.

11 Innovation The Agency's direct contribution to the pursuit of innovation objectives and actions set out in the RES can be summarised as follows: Northwest Science Strategy A review and updating of the Strategy was undertaken by the Northwest Science CounciL.

The North West Science Fund of £15m was launched with 41 bids totallng over £100m

received. The Fund wil support commercial technologies in the North West and be phased

over three years. The Science Council also reviewed a number of Cluster strategies including Chemicals, Biotechnology and Textiles. The Daresbury International Science Park is a flagship project within the Science Strategy and progress is described under section 6 above. This project wil accommodate the Cockcroft Institute, a collaboration between

three

Universities and Daresbury Laboratory, which secured a £7m grant from PPARC for R&D

into accelerator science against strong opposition from elsewhere in the UK. This was a major coup for the region's science base. Regional

Innovation Strategy

The Strategy was reviewed through a public consultation that provided recommendations to improve regional implementation. Continuing innovation support and knowledge transfer

projects have performed well, including those transferring technology from the defence sector to the civil sector and those improving SME innovation performance. The Motivating Business to Innovate project completed during the year, having helped over 300 SMEs to improve their innovation performance. The move of Campus Ventures into administration caused practical difficulties in implementing the Regional Incubation Strategy, which is being reviewed by NWDA during 2005.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Operating review (continued) 11 Innovation (continued) Higher Education Innovation Fund (HEIF) Round 2

NWDA match funded HEIF 2 allocations to North West Higher Education Institutions and led the regional process for evaluation of the national HEIF 2 bids. All HElF2 projects are now well underway and making good progress. These projects aim to meet the needs of the key growth sectors, putting systems in place to ensure knowledge transfer, address workforce development issues, new business creation and graduate retention.

E-Merlin

Work started on the e-merlin project at Jodrell Bank, which is the provision of a 217km optical fibre network connecting five radio telescopes in other parts of the country to the giant

Lovell telescope at Jodrell Bank. The project, which is funded by NWDA, University of Manchester, UMIST, PPARC and the University of Cambridge, wil secure Jodrell Bank's leading position in world astronomical research.

NW Genetics Knowledge Park The Nowgen Centre, jointly funded by the NWDA and ERDF, is now complete. A partnership

project between Manchester, Liverpool and Lancaster Universities and the Central Manchester and Manchester Children's University Hospital, it wil ensure that the outcomes of genetics research are successfully applied.

InfaLab21 A Lancaster University initiative to establish a world class Centre of Excellence for research, development and commercialisation of ICT, was opened. NWDA made ÂŁ10m available for construction of the building. A key aim of the Centre is to promote and accelerate technology

transfer between the ICT research in the University and local and regional industry, especially SMEs.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Governance The Board 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. Details of transactions with such entities in the financial year are disclosed in note 31.

In December 2004 Nevile Chamberlain, John Dunning, Richard Leese, Dennis Mendoros were replaced by David Brockbank, Peter Hensman, John Merry and John Moverley.

Bryan Gray MBE DL (appointed April 2002)

Bryan Gray is Chairman of the Northwest Regional Development Agency. He is Chairman of Baxi Technologies, now part of Baxi Group Limited, one of Europe's leading heating companies. He is Vice President of Micropower, promoting new energy technologies. He is Pro Chancellor of the University of Lancaster and a member of the National Learning & Skills CounciL. He was Chairman of Preston North End Football Club until October 2001 and

was a Trustee of the National Football Museum until July 2003. He is a member of the National Learning and Skils Council, a member of Liverpool Capital of Culture Board, a Trustee of National Museums Liverpool and a Director of Culture Northwest.

Professor Sir Martin Harris, CBE, DL (appointed December 2001) Deputy Chairman of NWDA. Formerly Vice Chancellor of the University of Manchester, he is now Chancellor of the University of Salford and Deputy Chairman of USS Limited. He is also

Chair of Manchester Knowledge Capital and Director for the Offce of Fair Access.

David Brockbank (appointed December 2004) A property developer whose current projects are the conversion of a redundant wood mill into

the largest employment site in the Lake District and the development of the world's first "green bridge," across Morecambe Bay, linking Barrow and Lancaster. He is Director of Rural Regeneration Cumbria (NWDA funding conduit) and a member of Lancaster University Council and Cumbria Tourist Board. He was appointed by the Secretary of State to the Lake District National Park Authority from 1988 to 1997.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Governance (continued) The Board (continued) Joseph Dwek CBE (appointed December 2003) Executive Chairman and Chief Executive of Bodycote International Plc from 1972 until 1998, when he retired. Currently a Director of City Invoice Finance Ltd, Jerome Group PI,

Penmarric Plc, Opal Property Group Ltd and Mercury Recycling Ltd; Chairman and Chief Executive of Worthington Group PLC.

Formerly Chairman of the Mersey Basin Campaign, Healthy Waterways Trust, and Council Member of ENCAMS. Currently Chairman of Envirolink and a member of the Board of the DTI Environmental Innovation Advisory Group, amongst other offces. Peter Hensman (appointed December 2004)

A chartered accountant and engineer who has spent most of his career in the general and financial management of manufacturing companies, Peter is now Executive Director of a small group of companies involved in tourism, leisure and property in Cumbria. He is a nonexecutive Director of Cumbria Rural Enterprise Agency and Furness Building Society. He chairs Cumbria Community Foundation and chaired Kendal Brewery Arts Centre from 2001-

2005 where he remains a Trustee. Robert Johnston (appointed December 2002)

From 1996-2005 Rob was Managing Director of the Visual Link, a Cumbrian based worldclass creative technology SME specialising in ICT, media and communications, serving a range of blue-chip customers. The company won numerous international awards - the International Visual Communications Association's Millennium and 2003 Gold Awards for Multimedia, and the 2002 and 2003 Silver Awards for Interactive Multimedia Publishing.

In 2001 Rob created Enabling Educational Excellence (e), a company producing award-

winning e-Iearning teacher training materials and creating bespoke change-management distance learning packages. Rob is a member of Cumbria Learning and Skills Council and is currently involved in settng up and chairing the Cumbria Digital Development Network.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Governance (continued) The Board (continued) Cllr Dr Pauleen Lane (appointed December 2001) She is Mayor and Elected Member of Trafford MBC. A civil engineer who has worked in

engineering practice, Dr Lane currently lectures in Geotechnics and Computing at the University of Manchester.

Dr Lane is also non-executive Director of English Partnerships, North West regional Trustee for Lloyds TSB Foundation charity and an Audit Commissioner.

Dave McCall (appointed December 2003) Dave has been Regional Secretary of the Transport and General Workers Union since 1996 and Chair of the North West TUC since 2002. He has been a full time trade union offcial since 1980 with experience of public appointments on the North West Industrial Development Board. He served on the governing body of Manchester Metropolitan University.

He is currently a member of the Economic and Social Partners Group in the' North West Regional Assembly and also

serves on the Northwest Constitution Convention.

Cllr John Merry (appointed December 2004) Leader (Labour) Salford City CounciL. John is a Board member of the National Learning &

Skills Council and the Greater Manchester Learning & Skills CounciL. He has previous membership of various organisations and committees with an education and training remit. He has been a full time Councilor since 1990 with previous career experience in retail and

sales. In addition to being a councillor, he has held office at the local branch of the Labour party and canvassed on its behalf.

Professor John Moverley OBE (appointed December 2004)

Chief Executive and Principal of Myerscough College and has 27 years experience of further and higher education. He Chairs the Lancashire Rural Partnership and is Vice Chair of the of North West Rural Affairs Forum, which he helped to establish. He was an invited member an All Party Rural Economy Group founded in the House of Lords and is a member of the

DEFRA Regional Steering Group and a Theme Champion for Sustainable Food and Farming. He held office as an independent parish councillor in his local village from 1998 to 2003. He holds no other Ministerial appointments.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Governance (continued) The Board (continued) CUr Marie Rimmer CBE (appointed December 2002)

Leader (Labour) of St Helens CounciL. She is Chair of the Local Strategic Partnership and a Director of St Helens Chamber and The World of Glass. . She is a Board Member of the Mersey Partnership. She was the Chair of the former Association of Metropolitan Authorities Housing Committee and served on the European Committee of the Regions Social Affairs Committee. She was also the Chair of the North West Coalfields Communities Campaign.

She has been politically active on behalf of the Labour party since 1969, and has held offce

at branch, constituency and district party leveL. She does not hold any other Ministerial appointments.

Anil Ruia OBE JP (appointed December 2001) Director of Wrengate Limited. The company imports, distributes and converts textiles and

also has a controlling stake in Warren Tea Limited, India, engaged in the business of growing, manufacture and sale of tea.

A magistrate, Mr Ruia also holds a number of positions which contribute to the economic

regeneration of the Northwest including Chairman of the North West International Trade Forum, Deputy Chair Manchester: Knowledge Capital and non-executive Director Granada Television Ltd.

Cllr Mike Storey CBE (appointed December 2001) Leader (Liberal Democrats) of Liverpool City Council, Cllr Mike Storey is its longest serving member. He is the Headteacher of Plantation CP School in Halewood Merseyside. Mike has been a member of the LGA Economic Regeneration Committee from 1996,

previous to that he was a Member of AMA Economic Regeneration Committee. He is also a Board Member for The Mersey Partnership, Liverpool Vision, Speke Garston Development Company until 31 March 2003, Liverpool Land Development Company from 1 April 2003.

Brenda Smith (appointed December 2001)

Group Managing Director Europe, Ascent Media Group. Brenda was Managing Director, Granada Television and Managing Director, Studios Granada Plc until May 2004, when she became Deputy Chair, Granada Television Ltd.

Brenda is also a Board Member of Liverpool Vision and has chaired the Regional Marketing

Forum since December 2002. Member of Tourism Forum, Non-executive Director of Manchester Airport Aviation Services, Non-executive Director of AFM Lighting Ltd and Chair of Skillset London Forum.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Governance (continued) The Board (continued) Professor Maureen Wiliams (appointed December 2002) Professor Williams is the Chief Executive and founder of the Merseyside Development

Fellow and Visiting Professor of Sociology (Governance) at Liverpool John Moores University and Chairs the Big Lottery Fund's North West Community and Voluntary Sector Funding Programme (previously The Community Fund). Foundation. She'is an Honorary

She is also Co-founder of Community North West, and Advisor and previous Chair of Telescope Technologies Ltd. She is a member of the Greater Merseyside Learning and Skils Council and a Senior Expert ยกConsultant with the Council of Europe.

Board Meetings and Committees The Agency's Board meets 11 times a year. In addition the Remuneration Committee convened on 5 occasions and the Audit Committee had 5 meetings during the year to 31

March 2005. In addition, there are seven formal sub-committees, which meet regularly throughout the year, these are:

Enterprise and Innovation

Environment

Infrastructure Rural Urban

Marketing & Communications Social Inclusion

Annual General Meeting The Agency's ArinualGeneral Meeting was held

on 24 September 2004 at the Manchester

International Conference Centre, with a keynote address from Sir Bobby Charlton. The conference outlined the key activities made by the Agency and its partners in the preceding year. The Chief Executive and Chairman presented on their future plans for the region.

The 2005 Annual General Meeting wil be held on 16 September 2005.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Governance (continued) Code of Best Practice Board Members are governed by a Code of Best Practice, which amongst other things

outlnes: 路 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 concerning any of the above can be obtained from the Agency's Warrington Headquarters.

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 wil fu

lfi

I its obligations: as an

employer, as programme deliver and as a leader I catalyst within the region.

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: 路 No requests for information were received which specifically referred to the Code;

. No charges were levied for the information supplied; . No replies to requests for information exceeded 20 days;

路 No complaints against the Agency were referred to the Parliamentary Commissioner for Administration (the Ombudsman).

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Governance (continued) Freedom of Information Act and the publication of information In November 2000 the Freedom of Information Act received Royal Assent and became fully

operational on 1 January 2005. The Act applies to some 100,000 public authorities, including England's nine Regional Development Agencies. The Act provides greater access to all types of recorded inform.ation held by public authorities and imposes obligations on them to disclose information, subject to a range of exemptions.

Section 19 of the Act requires public authorities to adopt and maintain a publication scheme which relates to the publication of information by the authority and publish information in

accordance with its publication scheme. Eight of the nine English RDAs agreed to a collective publication scheme which outlines the information that wil be published by each of

those RDAs. The Northwest Regional Development Agency took responsibilty for the development of the RDAs model publication scheme and the Information Commissioner approved this in October 2002. The publication scheme is available at ww.nwda.co.uk.

The Agency received 21 requests for information under the Act between 1 January and 31 March 2005. All were responded to within the 20 day deadline, with the exception of 2 instances where the deadline was extended under the Acts rules as exemptions were being

considered.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Environmental Policy Statement 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 wil:

· 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 the Government's 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 responsibilities and ensure that environmental management is included within our staff induction and training programmes;

· Develop and implement a Green :Travel Plan for business and commuter travel for all of our offces and 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 offces. In the longer term we will:

· Reduce energy and resource consumption within the Agency by promoting effective and

effcient reduction methods consistent with best practice; · Set and achieve measurable targets against agreed baselines across the Agency for key

performance criteria such as energy, transport, emissions, waste, water and environmental incidents. This includes setting appropriate environmental indicators and targets to measure our impact on the environment of the region e.g. CO2;

· Meet and, where possible, adopt best practice 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-efficient 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;

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Environmental Policy Statement (continued) . 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; 路 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.

Financial Statements

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Foreword Statutory background The Northwest Regional Development Agency ('the Agency') was established under the

provisions of the Regional 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 is an Executive Non-

Departmental Public Body (NDPB) sponsored by the Department of Trade and Industry (DTI).

The Agency became fully operational on 1 April 1999 when it took over the regional activities of English Partnerships and the Rural Development Commission and the SRB Challenge Fund formerly administered by Government Offce for the North West. A number of other activities have subsequently been transferred into the Agency, notably the

business of Inward Limited, the Northwest Tourist Board, the Selective Finance for Investment Programme, the development of skils and employment, policy and business support and delivery mechanisms, and the North West Business Link Organisations.

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 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 Agency's state of affairs at the year end and of its income and expenditure, total 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, reproduced on page 72, issued by the Secretary of

State, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis; . 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 Offcer of the Northwest Regional Development Agency. His responsibilities as Accounting Offcer include responsibility for the propriety and regularity

and value for money of the public finances; the keeping of proper records; and advising and informing the Board of financial considerations. These requirements are set out in the "NonDepartmental Public Bodies' Accounting Officer's Memorandum" issued by the Treasury and

published in Government Accounting. The Agency and the Chief Executive are also responsible for ensuring that there are appropriate controls over any publication of the Financial Statements, including the publication of the National Audit Offce audit report on the Agency's website and in other electronic forms.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Foreword (continued) Financial Memorandum The Secretary of State has issued the Agency with a Financial Memorandum setting out the financial framework under which the Agency should operate. The Agency has complied in all material respects with the terms of this memorandum during the course of financial year.

Results for the year and review of activities There was no surplus or deficit for the year after taxation (2004: £nil).

The Agency's total expenditure for the year amounted to £416.0m (2004: £358.1m), of which £380.2m (2004: £328.2m) was spent on delivering programme activities. The full results for the year are contained in the Agency's financial statements set out below. Between 1 April 2004 and 30 September 2004 the Agency undertook th6 Chair of Chairs role

on behalf of all nine RDAs. This involved representing the RDAs in strategic policy discussions with Government Departments and Ministers, and leading RDA collaboration.

The Agency continued to work with Yorkshire Forward and ONE North East to develop and establish the Northern Way growth corridor, stretching from Liverpool to Hull and northwards

to Newcastle. The aim is to boost the productivity of the whole of the North of England, reduce regional disparities, and tackle social and economic exclusion by linking areas of opportunity and need. From 1 April 2004 the Agency became responsible for the administration of the Selective

Finance for Investment in England (which replaces both the Enterprise Grant Scheme and Regional Selective Assistance, previously administered by the Small Business Service).

During the year the Agency has been developing the concept of Sub-Regional Partnerships (SRPs), and this wil continue into the forthcoming year. The SRPs will be delivered through

funded Action Plans that wil include initiatives to strengthen delivery capacity.

Significant changes in fixed assets On 1 April 2004 Investment Properties with a value of £81.6m were held by the Agency. During the year there were additions at a cost of £1. 7m and disposals from this portolio with an aggregate book value of £3.5m. At 31 March 2005 the Investment Property portolio was

re-valued, resulting in a revaluation surplus of £22.8m, with £0.8m of this surplus being written back to the Income and Expenditure Account to be offset against un

realised deficits

previously charged, and the remaining surplus was applied to the Government Grant

Reserve.

Post balance sheet events With effect from 1 April 2005 the assumed responsibilty for payments of rural grants previously administered by the Countryside Agency. Accruals transferred to the Agency as at 1 April 2005 amounted to an estimated £150,000.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Foreword (continued) Future developments The Agency wil lead the review of the Northwest's Regional Economic Strategy for 2006, ensuring that the Regional Spatial Strategy, Housing Strategy, Northern Way Growth Strategy, City Region Action Plans and the Regional Transport priorities are aligned with the Northwest's economic priorities.

The 2004 Spending Review allocated ÂŁ1.5bn for NWDA investment in the region over three

years from 2005-8. For 2005-6 the Agency's Board has agreed an investment plan of ÂŁ420m for projects spanning the range of the Agency's responsibilities. This has involved a thorough prioritisation of planned and committed expenditure as the available resources are

not suffcient to fund every project seeking support.

The Agency wil implement its effciency plan and enhanced performance management systems to support the delivery and project management of key priorities and programmes.

Learning and development of all employees wil continue to be valued.

Board members 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 Regional

Development Agency, which is a public document available from the Agency's offices.

Bryan Gray MBE OL, Chairman (appointed 1 Apri/2002)

Professor Sir Martin Harris CBE OL, Deputy Chairman (appointed December 2001) Oavid Brockbank (appointed December 2004) Joseph Owek CBE (appointed December 2003) Peter Hensman (appointed December 2004) Robert Johnston (appointed December 2002)

Or Pauleen Lane (appointed December 2001)

DaveMcCall (appointed December 2003) CUr John Merry (appointed December 2004) Professor John Moverley OBE (appointed December 2004)

CUr Marie Rimmer CBE(appointed December 2002) Anil Ruia OBE (appointed December 2001) Brenda Smith (appointed December 2001) CUr Mike Storey CBE (appointed December 2001)

Or Maureen Wiliams (appointed December 2002)

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Foreword (continued) Board members (continued) Brief biographies for the Board Members 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.

The Agency maintains a Register of Board Members' Interests, which is available on request by contacting the Executive Director of Operations at the Agency's offces at Renaissance

House, Warrington. Members declare their interests to the Board in any transactions involving relevant organisations.

Employment of disabled persons The Agency is committed to p'roviding equal opportunities for all and wil 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 undisputĂ¨d invoices either within 30 days or the terms agreed with the supplier. In 2004-5 the Agency did not achieve this target paying 83% (2004: 67%) of invoices within 30 days. The Agency's ability to pay suppliers within the target timescale has improved considerably on the previous year, and the Agency will seek to continue this improvement in 2005-6 with the aim of achieving the prompt payment target in the forthcoming year.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Foreword (continued) Audit services

The Comptroller and Auditor General is appointed by statute to audit the Northwest Regional

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 ÂŁ68,000 The Comptroller and Auditor General also has statutory powers to report on economy,

efficiency and effectiveness with which the Agency has used its resources. In November 2003 the Comptroller and Auditor General published the 'Success in the Regions' report on

how the Agencies and the departments work together. This and other reports issued by the Comptroller and Auditor General can be found on the National Audit Offce 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 2004/5, the NWDA Board formed an Environmental Sub-committee to advise the Board on the implementation of the Regional Economic Strategy as it pertains to the environment. An

Environment Action Plan has been developed to assist the Sub-committee in monitoring

progress including energy conservation, waste reduction and minimising greenhouse gas emissions. The Action Plan addresses Internal Environmental Management, Mainstreaming

into NWDA Policies and Processes, Influencing the Region and Single Programme expenditure on Projects and Programmes and incorporates action from the Memorandum of Understanding with the Environment Agency.

In the last year, the NWDA has defined its significant environmental aspects. As a result it has: developed a Green Travel Plan to reduce the emissions from its business vehicles; developed a sustainable development communications strategy; implemented staff training

on Environmental Management and has commenced work on adoption of sustainable procurement practices. Through its single programme expenditure, the Agency has supported Constructing Excellence and RENEW (the region's centre of excellence for regeneration) to influence improved construction practices. The Agency has also developed

a Business Resource Effciency and Waste (BREW) programme with key partners and appointed a co-ordinator for the programme.

In addition, the Agency continues to support programmes aimed at developing the environmental technologies sector including transforming waste into products. The Agency continues to fund business support programmes to assist regional businesses in reducing

their greenhouse gas emissions, adapting to climate change, reducing their energy consumption and support them in achieving excellence in corporate responsibility.

The Northwest Regional Development Agency's Environmental Policy is laid out on page 27. The Policy will be reviewed and updated as part of the Agency's Environmental Audit

Ă§\-

~ ./'\

Sleven BroWd Chief Executive Officer

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Statement on Internal Control Scope of Responsibilty As Accounting Offcer, I have responsibility for maintaining a sound system of internal control within the Agency. This system supports the achievement of the Agency's policies, aims and

objectives, set by the Board, whilst safeguarding it's assets and the public funds that it

utilses, for which I am personally responsible, in accordance with the responsibilities assigned to me in Government Accounting.

The Purpose of the System of Internal Control The system of internal control is designed to manage rather than eliminate the risk of failure

to achieve policies, aims and objectives. It can therefore only provide reasonable and not absolute assurance of effectiveness.

The system of internal control is based on a continuous process designed to identify the

principal risks to the achievement of the Agency's policies, aims and objectives, to evaluate the nature and extent of those risks and to manage them efficiently, effectively and economically. This process has been in place for the year ended 31 March 2005 and up to

the date of approval of the annual report and accounts and accords with HM Treasury guidance.

Capacity To Handle Risk The Board sets the Agency's policy and attitude towards risk. The Audit Committee

approved a revised and updated risk management policy during the year, on behalf of the Board.

The Executive Management Board, led by the Chief Executive, is responsible for the operation of the Agency's corporate risk management process. A new Head of Risk joined the Agency during the year and the corporate risk management process has been refreshed and reviewed by the Head of Risk, Executive Management Board and Audit Committee.

The Risk and Control Framework The main processes which the Agency has in place for identifying, evaluating and managing risk are: (a) Risk Management Strategy

Our risk management strategy is updated annually and approved by the Audit Committee. The risk management strategy sets out the Agency's approach to the different stages of the risk management process including risk identification, analysis, evaluation and control. (b) Directorate Risk Registers

Risk registers are maintained by each of the Agency's Directorates. The most significant risks identified by the Directorates are incorporated into the Agency's overall risk register.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Statement on Internal Control (continued) The risk and control framework (continued) (c) Review of Risk Registers

The Directorates update the risk registers on a quarterly basis as part of the business planning process. Where controls are not considered to be working effectively, further action is put in place. The Executive Team' review the Agency risk register on a regular basis and make changes as appropriate.

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 Executive Management Board 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 Executive Management Board and delivered to the relevant teams through induction training, team meetings, and via em ail and the Intranet. These address issues such as project appraisal and monitoring, financial

management and control, procurement and legislation, for example the Freedom of Information Act.

Project Management System The Agency embarked on a comprehensive review of its system for the management of projects during the year.

The Systems and Process Improvement Programme is designed to ensure the guidance

offered by the DTI under the Single Programme is comprehensively adopted throughout the whole Agency. Following discussion of the new project management system, and testing on

key pilot projects, the new system will go live during 2005/2006 with support from a comprehensive staff training programme.

Significant Internal Control Issues Any significant internal control issues wil be dealt with by Executive Management, with advice where appropriate, from the Head of Risk, internal and external audit. There were no significant control issues during the year.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Statement on Internal Control (continued) Review of Effectiveness As Accounting Offcer, 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, the Head of Risk and the Executive Management Team within NWDA 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. The Board and the Audit Committee have advised me on the implications

of the result of my review of the effectiveness of the system of internal control, and a plan to address weaknesses and ensure continuous improvement of the system is in place.

-\ 8 July 2005

Northwest Regional Development Agency The Certificate of the Comptroller and Auditor General to the Houses of Parliament and the Northwest Development Agency

31 March 2005 I have audited the financial statements on pages 40 to 71 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 44 to 47.

Respective responsibilties of the Northwest Regional Development Agency, the Chief Executive and Auditor As described on page 30, the Northwest Regional Development Agency and Chief Executive

are responsible for the preparation of the financial statements in accordance with the Regional Development Agencies Act 1998 and directions made thereunder by the Secretary of State and for ensuring the regularity of financial transactions. The Northwest Regional Development Agency and Chief Executive are also responsible for the preparation of the

other contents of the Annual Report. My responsibilities, 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 also report if, in my opinion, the Foreword is not consistent with the financial statements, 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.

I review whether the statement on pages 35 to 37 reflects the Agency's compliance with 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 Offcer'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.

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 Regional Development Agency and Chief Executive in the

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

Northwest Regional Development Agency The Certificate of the Comptroller and Auditor General to the Houses of Parliament and the Northwest Development Agency

31 March 2005

Basis of audit opinion (continued) 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, whether caused

by error, or by fraud or other irregularity and that, 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. 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

Regional Development Agency at 31 March 2005 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 . 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 have no observations to make on these financial statements.

John Bourn Comptroller and Auditor General

National Audit Offce

157 -197 Buckingham Palace Road Victoria

Date July 2005

London SW1W 9SP

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Income & Expenditure account For the year ended 31 March 2005 Note

2005 ÂŁ000

Restated 2004 ÂŁ000

Income Grant-in-Aid Small Business Service funding European funding Coalfield and other government grants Transfer from government grant reserve Rents and maintenance charges

Claw-back of grant and contributions '~ Proceeds from disposal of Assets Other income

323,457 19,490 18,120 4,999 14,721 12,269 9,669 7,474 3,770

263,625 18,859. 16,158 2,419 19,498 13,135 4,063 16,945

413,969

357,263

325,364 16,348 14,846 32,001 1,659 5,856 22,002 (2,971) (310)

263,961 14,128 15,391 35,557 1,787 10,757 18,545 (2,524) 100

1,255

406

416,050

358,108

2,561

Expenditure Grants paid for programme expenditure

Salaries and wages Other administrative costs

6 4

Non-grant programme expenditure Non-grant coalfield expenditure . Book value of Assets sold

Asset valuation write-down Asset valuation write-back Release of Environmental Provisions Bad debts and movements in provision for bad and

doubtful debts

Operating Deficit Interest receivable Notional cost of capital

5 11

(Deficit) for the year on ordinary activities

Taxation

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

(2,081)

(845)

2,080 (6,092)

833 (5,809)

(6,093)

(5,821 )

(6,092)

(5,809)

6,092

5,809

(Deficit) I Surplus for the year carried forward

All activities are from continuing operations. The notes on pages 44 to 71 form part of these accounts.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Statement of total recognised gains and losses For the year ended 31 March 2005 2005 ÂŁ000

2004 ÂŁ000

Surplus for year carried forward

Revaluation on Investment and Development Assets

26,366

Grant receivable not released to the Income and

Expenditure Account

41,821

42,406

Total recognised gains

68,187

42,406

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Balance sheet As at 31 March 2005 Note

2005 ÂŁ000

2004 ÂŁ000

Fixed Assets Intangible Operating Assets

145.1

Tangible Operating Assets Investment Properties Investments

3,691/

4,491

15 16

100;5151

81,587 4,979

119,300

91,138

14,949/

Current Assets Development Assets

17 18 26

Debtors Cash at bank and in hand

Creditors: Amounts fallng due within one year

Net Current Assets

90,670/ 72,434 (

26,749/ 189,853

148,422

(80,813) ('

(53,746)

109,040

Creditors: Amounts fallng due after more than one year

Provisions For Liabilties And Charges

Total Assets Less Total Liabilties

77,612 36,466 34,344

(15,692) /

(3,306)

94,676 (2,104) (3,239)

209,342/

180,471

204,287 14,144 (9,089)

172,089

209,342

180,471

Reserves Government Grant Reserve European Funding Reserve

Income and Expenditure Reserve

23 24 25

17,471 (9,089)

These financial statements were approved by the board on 8 July 2005, and were signed on its behalf by:

~~Vc" l\ IW

s\-

Bryan M Gray \

Chairman

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Cash flow statement For the year ended 31 March 2005 Note

Net Cash Outflow From Operating Activities

2005 £000 (47,450)

Returns On Investments And Servicing Of Finance Interest Received

Taxation UK Corporation Tax paid

2004 £000

(19,503)

2,080

833

385

1,040

Capital Expenditure And Financial Investment Purchase of Fixed Assets Proceeds on disposal of Fixed Assets

(9,141) 4,710

(10,633)

Net Cash Outflow Before Financing

(49,416)

(18,392)

Financing for Assets

41,821

42,012

Increase in Cash

(7,595)

23,620

Net liquid funds at 1 April 2004

34,344

10,724

26,749

34,344

9,871

Financing

Net liquid funds as at 31 March 2005

Reconcilation of operating deficit to net cash outfow from operating activities

2005 2004 £000 £000 Operating Deficit

(2,081)

(845)

(31,379) (4,659) 10,298 1,102

European advance funding for BIS Loss I (Profit) on disposal of assets Asset valuation write-down Asset valuation write-back

(32,030) (42,062) 37,409 1,430 (310) (14,721) (11,935) (3,328) 1,147 22,002 (2,971)

Net cash outflow from operating activities

(47,450)

(19,503)

Increase in development assets Mci;l'"io",,,,, Increase in debtors Increase in creditors Depreciation and amortization Environmental liability provision increase

Transfer from government grant reserve Transfer from European funding reserve

100

(19,498) (8,877) 17,471 886

18,545 (2,524)

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes to the financial statements 1. Accounting policies

(a) Basis of Accounting

The Financial Statements of the Northwest Regional Development Agency have been 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 guidanc$ 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 departure is given in note 1(c) below. Non-grant programme expenditure, salaries and wages, and other administration costs have

been re-classified following a review of the analysis of expenditure during the year. The comparative information has been restated accordingly. The revised classification is considered to be more representative of the activity undertaken by the Agency. Further details are given in note 4.

(b) Basis of Consolidation The Agency holds a number of investments in other subsidiary and associate undertakings. No consolidated financial statements are presented on the grounds that there is no material

difference between the Agency's own financial statements and those prepared on a consolidated basis.

(c) Intangible Operating Assets Intangible Operating Assets consisting of softare licences are valued at amortised historic cost, which is not materially different from amortised replacement cost. ( d) Tangible Operating Assets

Tangible fixed assets are valued at depreciated historic cost, which is not materially different from depreciated replacement cost. (e) Investment Properties

The portolio of industrial and commercial investment properties held at anyone 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 & 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 Institute of Asset Valuation Practice and Guidance Notes (4th Edition) published by the Royal Chartered Surveyors.

A valuation for the whole portolio was carried out as at 31 March 2005, which was undertaken by King Sturge, International Property Consultants.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 1. Accounting policies (continued) (e) Investment Properties (continued)

In accordance with SSAP 19, no depreciation is provided in respect of investment properties.

This departure from the requirement of the Companies Act 1985 for all properties to be depreciated is, in the opinion of the Board, 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 of the

properties and the amount attributed to this factor by the valuers cannot reasonably be separately quantified.

Acquisitions and disposals of land and buildings are accounted for on the date of legal completion. (t) Investments

Investments are valued at market value unless this cannot readily be obtained, where an alternative method of valuation is used.

Movements arising on the revaluation of investments are reflected in the government revaluation reserve, except for impairments and reductions in value below historical cost, which are reported in the income and expenditure account.

(g) 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 carrying value being written off

to the Income & Expenditure Account. Movements arising on the revaluation of development assets in excess of historical cost are reflected in the government grant reserve.

Acquisitions and disposals of Development Assets are accounted for on the date of legal completion. (h) 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:

Owned property 50 years

Leasehold buildings with less than 25 years to run Period of lease

Office furniture, fittings and equipment 5 years

Computer equipment 3 years

Softare licences 3 years

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 1. Accounting policies (continued) (i) 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. Approval from the DTI is obtained for any write-off in excess of ÂŁ250,000.

Partnership workspace schemes, the Agency's investment with partners, mainly local pace has been disclosed in the Balance Sheet at a valuation based on the present value of estimated future rental income. Expenditure on authorities, to provide rural works

these projects is written off in the year of spend. lj Pension Costs

Certain of the employees of the Agency participate in the Principal Civil Service Pension

Scheme (PCSPS) and the English Partnerships Pension Scheme (EPPS). The PCSPS and EPPS are defined benefi schemes. The 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 (k) Government Grants

The 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 & Expenditure Account in the year to which they relate. Government Grants in respect of capital expenditure are credited to the Government Grant Reserve (GGR) and released to the Income & 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. (I) European Grants

The 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 & 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 (DEFR) and released to the Income & 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. (m) 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. (n) Foreign Currency Transactions

Transactions in foreign currencies are recorded in sterling at the rates prevailing at the date of transaction. Resulting exchange gains and losses are taken to the Income & Expenditure Account.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 1. Accounting policies (continued)

(0) Leases Operating lease rentals are charged to the Income & Expenditure Account over the period of the lease.

The Agency does not hold any finance leases.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 2. Analysis of total grant utilised In 2004-5, the Agency was funded by Grant-in-Aid from the

Department of Trade and

Industry. Restated 2005 £000

2004 £000

295,000 394 56,925

Opening net grant creditor I (debtor) Closing net grant debtor I (creditor)

315,000 650 46,526 6,093 4,022 23,661

Total grant receivable

395,952

334,589

Total relevant expenditure Less non-grant income

431,215 (35,263)

372,126 (37,537)

Total grant utilised

395,952

334,589

650

394

Grant in Aid credited to Income & Expenditure Account Other Income & Expenditure Account

703 1,662 32,030 6,776 323,457 30,674

1,945 4,369 31,379 4,319 263,625 28,558

Total grant utilised

395,952

334,589

2005 £000

2004 £000

Grant-in-Aid received from DTI Grant-in-Aid allocation for Regional Aggregation Board Grants received

Tránsfer from Government Grant Reserve

Regional Aggregation Board loan Total grant applied to: - Operational Asset additions - Investment Asset additions - Development Asset additions

- Investment additions

(13,708) (4,022)

Analysis of net closing debtor/(creditor):

Grant in Aid

Coalfields European Union

BIS

SBS Tax and interest

41,500 1,076 (5,104) (14,144) 333

13,852 307 2,707 (17,443) (2,679) (766)

23,661

(4,022)

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 3.

Analysis of income and expenditure by key driver

Total income Total recorded expenditure

Grant applied to capital additions recorded in GGR&

recorded in

I&E

Account

European Reserve

2005 £000

116,066 213,949 18,654 26,136

26,888 4,943

7,312 30,368 1,484

413,969

Business Development Regeneration Skils Infrastructure Investing in Image & Environment

Administration Coalfields

Grant applied to

Total income

Total

capital additions

expenditure

recorded in

GGR& European Reserve 2004 £000

I &E Account 2004 £000

Account 2004 £000

8,873

93,552 202,995 10,856 12,645

7,312 32,449 1,484

707 410

5,319 29,080 2,816

5,319 29,925 2,816

1,945 436

416,050

41,821

357,263

358,108

42,406

I&E

15,223 18,653

6,149

4. Other administration costs

Restated

2005 2004 £000 £000 Professional costs Marketing and PR Estate Management Non-recoverable VAT

Offce costs Operating lease rentals Other staff costs IT and communication Travel & Subsistence Depreciation and Amortisation

Contributions to Joint Ventures External Auditors' remuneration

1,388 2,360 2,676 340 2,169

2,194 1,977 2,657 341

1,095 1,430 239 68

1,756 1,479 1,229 1,102 1,096 1,102 392 66

14,846

15,391

1,251 923 907

Non-grant programme expenditure, salaries and wages, and other administration costs have been re-classified following a review of the nature of expenditure incurred. The comparative amount has been restated accordingly. The effect of the re-classification is to increase non-

grant programme expenditure incurred in 2004 by £;30,384,000 and reduce other administrative costs by a corresponding amount. There is no overall effect on total expenditure. 49

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 5. Interest receivable

Corporation Tax Interest

Bank deposit Rural loan interest

2005 £000

2004 £000

20 2,056 4

807

2,080

833

2005 £000

2004 £000

194 14 15

191

223

219

12,052 1,596 1,037

10,207 1,332 932

14,685

12,471

610 830

911

1,440

1,438

16,348

14,128

19 7

Salaries and wages

Board Members Board members salaries

Pension costs Social security costs

13 15

Staff Salaries and wages inc. overtime

Pension costs Social security costs

Temporary staff Recruitment agency staff Seconded staff salary costs

Total Salaries and wages

527

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 7. Staff numbers

The average number of staff employed by the Agency during the year (including all seconded staff) was 377 (2004: 357). The figures do not include recruitment agency staff. 2005 Senior

Department

Management

Chief Executive's Office

Operations

Enterprise and Innovation Development and Partnerships Corporate Resources

2005 2005 Seconded

2005 Total

2004 Total

112 88 77

27 79 87 102 62

376

357

Total 2005 £

Total 2004 £

88,615 15,861 2,410 5,531

86,877 15,550

Staff Staff

17 76 103 87 74

357

1 1

4 8

Emoluments of Board Members

The emoluments of Board Members can be analysed as follows: Name

Period of Appointment From To

Salary £

Pension £

Bryan Gray (Chairman) Professor Sir Martin Harris

April 2002 - Mar 2005

74,781 15,861

13,834

David Brockbank Neville Chamberlain 1 John Dunning 1

Joe Dwek Peter Hensman

Dec 2004 - Dec 2007 Dec 2004 - Dec 2007 Dec 2001 - Dec 2004 Dec 2001 - Dec 2004 Dec 2003 - Dec 2006 Dec 2004 - Dec 2007

ýRobert Johnston

Dec 2002- Dec 2005

Or Pauleen Lane

Brenda Smith Mike Storey

Dec 2004 - Dec 2007 Dec 2001 - Dec 2004 Dec 2003 - Dec 2006 Dec 2001 - Dec 2004 Dec 2004 - Dec 2007 Dec 2004 - Dec 2007 Dec 2002 - Dec 2005 Dec 2004 - Dec 2007 Dec 2004 - Dec 2007 Dec 2004 - Dec 2005

Maureen Wiliams

Dec 2002- Dec 2005

Richard Leese 1

Dave McCall Dennis Mendoros 1 John Merry John Moverley

Marie Rimmer Anil Kumar Ruia

2,410 5,531 5,531 7,931

2,410 7,931 7,931 5,531 7,931 5,531

2,410 2,410 7,931 7,931 7,931 7,931 7,931

5,531 7,931

2,410 7,931 7,931 5,531 7,931

7,775 7,775 2,592

5,531

7,775 7,775 7,775 2,592 7,775

2,410 2,410 7,931 7,931 7,931 7,931 7,931

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

1 Retired December 2004

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 8. Emoluments of Board Members (continued)

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 is

contracted for one day per week. Total accrued pension at 60

Total accrued

60 £

at 31 March 2005 £

at 31 March 2004 £

914

2,804

1,833

Real increase in

pension at Name Bryan Gray (Chairman)

pension at 60

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. With the approval of DTI, a pension and death in service benefit scheme has been put in place for the Chairman with contribution rates and pension benefits which are identical to the Principal Civil Service Pension Scheme but which is funded directly by the Agency. On his retirement, payment of the Chair's pension will be the responsible of the Agency, underwritten by DTI. The Agency is not permitted to invest its contributions of £13,834 and those deducted from

the Chairman's salary of £2,617 and an equivalent pension benefit has therefore been provided for in the Balance Sheet.

Similar arrangements were made for the previous Chairman whose pension is met year on

year from current resources.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 9. Emoluments of Chief Executive and the Most Senior Managers The emoluments of Board Members can be analysed as follows:

Name fur relevant Salary

Redun- 2005 2004

£ .£ £ £ £ £ £

period Bonus Benefits Pension dancy Total Total

Steven ßroomhead Chief Executive

122,400 18,360

8,199 22,644

- 171,603 132,266

97,872 2,862

1,022 18,106

- 119,862 34,608

ßernice Law Executive Director of

Operations lan Haythornthwaite Executive Director of Finance and Corporate

Resources

48,208

700 7,439

- 56,347

1,000

Helen France Executive Director of

Development and Partnerships Mark Hughes Executive Director of Enterprise and Innovation

92,295

2,969

4,765

3,852 17,075

145

550

- 117,987 57,250

3,664

Alan Turley

Executive Director of Enterprise and Innovation

54,160

2,961 10,020 65,917 133,058 34,524

The Board determines the performance pay for the Chief Executive 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 2004-5 targets related to Programme Delivery, the Review of the Regional Economic Strategy and the introduction of the Single Financial Framework, review and implementation of a new organisational structure and production of a corporate financial strategy.

The Chief Executive determines the performance pay of the Senior Management Team on

advice from the 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.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 9.

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, as follows: Lump

Steven ßroomhead ßemice Law

lan Haythomthwaite Helen France Alan Turley

Real

increase

Pension at

in lump

31 March

pension £000

sum £000

2005

40 -42.5

N/a N/a

0-2.5 0-2.5 5-7.5 0-2.5

N/a 20 - 22.5

N/a

£000

40 -45

1-2.5 0-5 30 -35

0-2.5

sum at

CETV

March

CETV

Employee contnbutions and

transfers

31 March

Real increase in CETV as funded by

employer £000

2005 £000

2004 £000

2005 £000

N/a N/a

520 23

415 - 417.5

2.5 - 5

2.5-5 0-2.5 2.5-5

N/a

90 - 95

299

408

N/a

£000

88 11

Columns 5 and 6 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 benefis accrued by a member at a particular point in time. The benefits valued are the member's accrued benefits and any contingent spouse's pension payable from the scheme. A CETV is

a payment made by a pension scheme or arrangement to secure pension benefis 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 2004-5 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 liabilties 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 calculated within the guidelines and framework prescribed by the Institute

and 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 1/8oth 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 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.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 10. Pension arrangements

The Agency has a number 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 and the 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 found in the resource accounts of the Cabinet Offce; Civil Superannuation (ww.civilservice-pensions.gov.uk).

For 2004-5, employer's contributions of ÂŁ1,447,718 were payable to the PCSPS (2004:

ÂŁ1,236,091) at one of four rates in the range 16.2 to 24.6 percent of pensionable pay, based on salary bands. Rates wil remain the same next year, subject to revalorisation of the salary bands. Employer contributions are to be reviewed every four years following a full scheme

valuation by the Government Actuary, The contribution rates reflect benefis 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 benefi schemes (classic, premium and classic plus). The schemes are unfunded

with the cost of benefis met by monies voted by Parliament each year. Pensions payable under classic, premium and classic plus are increased annually 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" stakeholder arrangement with a significant employer contribution (partnership pension account).

Employee contributions are set at the rate of 1.5% of pensionable earnings for classic and

3.5% for premium and classic plus. Benefits in classic 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. For premium, benefis accrue at the rate of 1/6Oth of

final pensionable earnings for each year of service. Unlike classic, there is no automatic lump sum (but members may give up (commute) some of their pension to provide a lump sum). Classic plus is essentially a variation of premium, but with benefis in respect of service before 1 October 2002 calculated broadly as per classic. Classic Scheme

Benefis accrue at the rate of 1/80th 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 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 il health. In this case, pensions are brought into payment immediately without actuarial

reduction and with service enhanced as for widow( er) pensions.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 10. Pension arrangements (continued) Premium Scheme Benefits accrue at the rate of 1/6Oth of final pensionable earnings for each year of service.

Unlike classic, there is no automatic lump sum, but members may commute some of their pension to provide a lump sum up to a maximum of 3/8Oths of final pensionable earnings for each year of service or 2.25 times pension if greater (the commutation rate is £12 of iump

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% of pensionable earnings. On death, pensions are payable to the surviving spouse or eligible partner at a

rate of 3/8ths the 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 il health. In this case, pensions are brought into payment immediately without

actuarial reduction. Where the member's ill health is such that it permanently prevents them undertaking any gainful employment, service is enhanced to what they would have accrued at age 60. Classic Plus Scheme

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, premium, 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 retirement). Further details about the CSP arrangements can

be found at the website ww.civilservice-

pensions.gov.uk (ii) English Partnerships Pension Scheme ('EPPS?

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

full actuarial valuation was carried out at 31 March 2002 and a new valuation is being undertaken in the current year. For 2004-5, normal employer contributions of £105,450 were payable to the EPPS (2004: £115,770) at the rate of 14.5% (2004: 14.5%) 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 benefits as they are accrued, not when the costs are actually incurred, and they reflect past experience of the scheme. At the balance sheet date there were no outstanding or prepaid contributions to the scheme. The accounts of the English Partnerships Pension Scheme are available from the

Secretary, at St George's House, Kingsway, Team Valley, Gateshead, NE11 aNA. All employees in the scheme are issued with a summary of the accounts.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 11. Notional cost of capital When calculating the surplus or deficit for the year, the Agency is required to include a notional cost of capital as expenditure, to the extent that there is no real charge for this. This has been calculated as 3.5% (2004: 3.5%) of the average of total assets less total liabilities. After the surplus or deficit for the year there is an entry reversing this amount.

12. Taxation 2005 £000

2004 £000

Current taxation Adjustments relating to previous year

(385)

(5)

Deferred taxation Deferred Tax provision

384

(7)

(1)

(12)

13. Intangible operating assets

Software Licences £000

Cost At the beginning of the year

122

Additions in year

111

At the end of the year

233

Amortisation At the beginning of the year Amortisation in year

At the end of the year

Net Book Value At the end of the year

At the beginning of the year

145 81

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 14. Tangible operating assets Land &

Total

£000

Computer equipment £000

3,524 210

2,458 382

7,090 592

buildings

Fixtures & fittings

£000 At the beginning of the year Additions in year Disposals in year

1,108

At the end of the year

1,108

3,734

2,809

7,651

111

1,436 675

1,052 685

2,599 1,382

£000

Cost or Valuation

(31 )

Depreciation At the beginning of the year Depreciation in year

Disposals in year

(21 )

At the end of the year

(21 )

133

2,111

1,716

3,960

At the end of the year

975

1,623

1,093

3,691

At the beginning of the year

997

2,088

1,406

4,491

Net Book Value

The Net Book Value of tangible operating assets does not

differ materially

from the

depreciated replacement cost of the assets.

15. Investment properties 2005 £000

2004 £000

81,587 1,662 (3,489) (2,000) 22,755

82,498 4,369 (6,682)

100,515

81,587

Cost or valuation At the beginning of the year Additions

Disposals Transferred to Fixed Asset Investments Revaluations At the end of the year

1,402

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 16. Investments ÂŁ000

Cost or valuation At the beginning of the year Additions in year Transfers in from Investment

5,376 6,775 2,000

Properties Revaluation

1,545

At the end of the year

15,696

Provisions At the beginning of the year Provided in year

Amounts written back

397 517 (167)

At the end of the year

747

Net Book Value At the end of the year

14,949

At the beginning of the year

4,979

The entities in which the Agency had an interest at the year end are as follows:

Name of Undertaking

Type of Organisation

Nature of Business

Interest

Subsidiary undertakings Estuary Management

Company limited by

Company Limited

guarantee

Provision of services at the Estuary Commerce

100%

Park Rural Regeneration Cumbria Limited

Company limited by

guarantee

Regeneration for Furness and Cumbria

81%

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 16.

Fixed asset investments (continued)

Name of Undertaking

Type of Organisation

Interest

Nature of Business

Associates New East Manchester Limited

Company limited by

Regeneration of East Manchester

33%

Regeneration of Strategic Investment areas in Liverpool

33%

Urban regeneration of Liverpool

33%

guarantee Company limited by

Management of

guarantee

Brunswick business Park

guarantee

Liverpool Land Development Company Limited

guarantee

Liverpool Vision Limited

Company limited by

Brunswick Business Park Limited Furness West Cumbria New Vision Limited trading as West Lakes

Company limited by

23.86%

Company limited by

Regeneration of West

guarantee

Cumbria

Company limited by

Regeneration of Ancoats area of Manchester

33%

Management of the development of Maryport

20.4% ordinary share capital 100% Preference share capital

20%

Renaissance Ancoats Urban Village Company Limited Maryport Developments Limited

guarantee Private limited

company

Harbour

Joint Ventures North West Business Investment Scheme

Limited partnership

Provision of loans and equity finance in North

80%

West Region

North West Seed Fund

Limited partnership

Provision of loans and

80%

equity finance in North West Region

Rising Stars

Limited partnership

Provision of loans and

80%

equity finance in North West Region

Regional Aggregation

Limited liability

Procurement and

Body Limited

partnership

distribution of broad

50% band

services Renewables Northwest Limited

Company limited by

guarantee

Development of Initiatives for renewable energy

50%

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 16. Fixed asset investments (continued)

The Agency's principle investments relate to the North West Business Investment Scheme ('BIS'), the North West Seed Fund and Rising Stars. Other investments are primarily held in

limited guarantee companies, which do not contribute to the investment carrying value. In addition, other long term interests in developments, not classified as development assets are

included in this caption. As at 31 March 2005, these investments represented ÂŁ2m of the overall carrying value. The investment in North West Regional Aggregation Board was written down in full during

2004-5. On 31 December 2004 the company ceased to trade and is in the process of being liquidated. Audited accounts were not available for the year ended 31 March 2005, but no significant distributions are expected to be received from the winding up.

The Memoranda of Association of the above associate investments, excluding New East Manchester Limited, provide that the assets shall not be available for distribution by way of dividend or in any other way that amounts to a distribution of available funds. In the event of any company being wound-up or dissolved, any remaining assets after all its debts and liabilties 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 share of the financial results, total assets or total liabilities of the company at the year end. The Northwest Business Investment Scheme has been primarily funded by the European Union with the objective of making equity-based investments in SMEs in the North West of England.

17. Development assets

2005 2004 ÂŁ000 ÂŁ000 At the beginning of the year Additions in year

Disposals Amounts written down: European aid-Funded Amounts written down: Grant In Aid-Funded

Revaluations At the end of the year

77,612 32,030 (2,358) (11,589) (9,896) 4,871

67,330 31,379

90,670

77,612

(4,071 )

(8,754) (9,394) 1,122

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 18. Debtors

Trade debtors Grant in Aid debtor

Other debtors Prepayments and accrued income

Value Added Tax European Regional Development Fund

Rural Loans Corporation Tax

2005 £000

2004 £000

16,018 41,499 3,521 2,711 1,789 6,354 26 516

12,832 12,997 560 6,143 1,063 2,707

72,434

36,466

2005 £000

2004 £000

42,429 1,114 28,891

19,967

72,434

36,466

2005 £000

2004 £000

24,119 49,731 391

42,490 3,378 1,448 6,128 302

80,813

53,746

2005 £000

2004 £000

682 6,487 576 73,068

3,500 2,692 156 47,398

80,813

53,746

53 111

Intra-government balance analysis:

Balances with other central government bodies Balances with local authorities Balances with bodies external to government

571

15,928

19. Creditors: Amounts fallng due within one year

Trade creditors

Accruals Other creditors Deferred Income Other Taxes and social security

3,951 2,621

Intra-government balance analysis:

Balances with other central government bodies Balances with local authorities Balances with NHS trusts Balances with bodies external to government

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 20. Creditors: Amounts fallng due after more than one year

2005 2004 £000 £000 Deferred Income - European Capital Grants

15,692

2,104

21. Provisions for liabilties and charges Deferred tax

At the beginning of the year Charge I credit to the Income &

Expenditure account At the end of the year

£000

Dilapidations £000

Environmental £000

Total £000

2,364

225

650

3,239

384

(7)

(310)

2,748

218

340

3,306

2005 £000

2004 £000

3,766

3,039 (14) (660)

22. Deferred tax

The major elements of deferred taxation are as follows:

Accelerated capital allowances Short term timing differences

Tax losses

(26) (992)

2,748

2,365

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 23. Government grant reserve 2005

2005

2004

£000

Tangible Operating Assets Additions Depreciation Disposals Intangible Operating Assets Additions Amortisation Investment Assets Additions Disposals Revaluations

150,821

172,089

Agency - at the beginning of the year

1,823

592

(1,383)

(1,061 )

(9)

(5)

122

111

(47)

(41 )

4,369

1,662

(3,489) 735

22,019

(6,682) 1,402

Development Assets

Disposals Amounts written off

Amounts written back Fixed Asset Investments Additions Amounts written off

Amounts written back Environmental Provision

RAB Loan Additions Amounts written off Amount released to I&E Account

21,635

20,584

Additions

(2,357) (9,896) 2,069

(171) 167 310

(4,071 )

(8,272)

2,802 2,637 1,545

2,646 (274) (100) 394

650

(394)

(650)

(14,721)

(19,498)

Transferred from Speke Garston Developments 9,341

Ltd

Release of Grant in Aid funding

Coalfield asset additions

At the end of the year

(6,093)

410

436

204,287

172,089

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 24. European funding reserve

2005 2004 £000 £000 At the beginning of the year Funding received during the year

17,471

Interest received Transferred to Deferred Income

812 (4,139)

19,116 28 (1,673)

At the end of the year

14,144

17,471

25. Income and expenditure reserve

2005 2004 £000 £000 Agency - at the beginning of the year

(9,089)

Transferred from Speke Garston Developments Ltd on 1 April 2003

At the end of the year

(2,503) (6,586)

(9,089)

26. Reconcilation of net cashflow to movement in net funds

2005 2004 £000 £000 Net funds at the beginning of the year Increase in cash for the period

34,344 (7,595)

10,724 23,620

Net funds at the end of the year

26,749

34,344

27. Contingent liabilties At 31 March 2005 there were no significant contingent liabilities (2004: nil).

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 28. Commitments (a) Operating leases

As at 31 March 2005 the Agency had annual commitments under operating leases as follows:

2005

Buildings £000

Leases expiring - within one year - between one and five years - over five years

2004

Others

Buildings

£000

33 241

121 131

1,110 1,110

Others £000

1,035

252

1,035

274

Rental costs of operating leases are charged to the Income & 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. (b) Capital commitments

Capital commitments at the end of the financial year for which no provision has been made, are as follows:

2005 2004 £000 £000 Authorised by the board and contracted

45,022

36,328

29. Financial instruments

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.

30. Post balance sheet events

On 1 April 2005 the Agency took over responsibilty for the activities of the Northwest Countryside Agency. The net liabilities amounting to £150,000 have been transferred to the agency as part of the transfer.

Northwest Regional Development Agency Annual report and financial statements Year ended 31 March 2005

Notes (continued) 31. Related party transactions

The Northwest Regional Development Agency is a Non-Departmental Public Body

sponsored by The Department of Trade and Industry ('DTI'). DTI is regarded as a related

party with which, during the year, Northwest Regional 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).

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

and Yorkshire Forward in the year.

Board Members took no part in the discussions which concerned organisations that Board Members have connections with as reported in the Register of Members' Interests.

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

(a) Subsidiary and associated undertakings

Sales J Connected Party

(Purchases)

ÂŁ

Debtor J (Creditor) ÂŁ

Subsidiary undertakings The Estuary Management Company Limited Rural Regeneration Cumbria

24,675 (801,357)

Associated undertakings New East Manchester Limited Liverpool Land Development Company Limited Liverpool Vision Limited Brunswick Business Park Limited Furness West Cumbria New Vision Limited - trading as West Lakes Renaissance Maryport Developments Limited Ancoats Urban Village Company Limited

(9,917,889) (2,813,443) (495,873) (33,513)

(408,312)

Joint ventures Northwest Business Investment Scheme Northwest Seed Fund Rising Stars Northwest Regional Aggregation Body Limited Renewables Northwest Limited

(4,388,702) (610,688) (1,776,316) (650,000) (90,746)

Grant claims

759,981

26,406 2,201,592

Chancellor prr Executive Chairman Vice President

Co-opted Member General

New East Manchester Limited

University of Salford

Voluntary Action Cumbria

Cumbrian Tourist Board

John Dunning

Board Member

Member Director Alternate Director

Director

Cumbria Rural Enterprise Agency

Lancaster University

New East Manchester Limited

MIDAS

G Mex Limited

Cllr Richard Leese CBE

Board Member

City Council

Manchester Ship Canal Company

Manchester

Director and Shareholder

Councillor

Trustee President

Cumbria Community Foundation

Grant claims

Goods and services Grant claims Grant claims

6,917,889 759,981 42,355 3,353,130 12,113

8,184 1,055,820

Grant claims

5,759,871

416

8,184

25,000 677,518

Grant claims

1,446,051

Board Member

Learning & Skills Council (National)

Council

Grant claims

6,917,889

Board Member

University of Central Lancashire

MIDAS

Grant claims

Honorary Fellowship

National Museum Liverpool

Chairman

Sir Professor Martin Harris Board Member

Grant claims

1,233,857 911,205 152,708 Grant claims

Grant claims

5,759,871

416

Pro Chancellor and Chair

Trustee

Lancaster University

Bryan Gray MBE, DL

Nature of transaction

Position

Related Party

Agency Organisations

ÂŁ ÂŁ

Payments

Income to the made to

Name and position

(b) Board members

31. Related party transactions (continued)

Notes (continued)

Annual report and financial statements Year ended 31 March 2005

Northwest Regional Development Agency

The Museum of Science & Industry

Board Member

Manchester Chamber of Commerce and

Anil Kumar Ruia OBE

Board Member

Cllr Mike Storey CBE

Director

Chairman

Director

Trustee

Council! Finance Committee

Director

Member Director

President

Director and Chairman

Member of Trustees Council

Member

Director and Chairman

Director

Trustee Chairman

Board Member and Trustee

Position

Liverpool City Council Councillor! Leader

Liverpool Land and Development Company Director

The Mersey Partnership Director

Liverpool Vision Director

Granada Television Limited

The Commonwealth Film Festival

North West Textile Network Limited

The University of Manchester

University of Salford

The Museum of Science & Industry

MIDAS

Asian Business Federation

Industry

University of Salford North of England Zoological Society The Manufacturing Institute

Board Member

Envirolink (North West) Lld

Neville Chamberlain CBE

East Lancashire Partnership Lld

Northern Technologies

North West Aerospace Alliance

University of Central Lancashire

Dennis Mendoros OBE,

Related Party

Name and position

(b) Board members (continued)

31. Related party transactions (continued)

Notes (continued)

945,976

8,184

2,544,939 2,813,443 10,093,558

495,873

144,123

153,633

341,575

1,081,665

1,446,051

3,364 759,981 344

4,284

333,944 4,456

1,446,051

1,476,903

776,27

6,344

508,701

344

911,205

Payments made to Agency Organisations

Income to the

Grant claims

Goods and services

Grant claims

Goods and services

Grant claims

Goods and services, Grant Claims

Grant claims

Grant c1aìms

Grant claims

Nature of transaction

Year ended 31 March 2005

Northwest Regional Development Agency Annual report and financial statements

Director

Related Party

MIDAS

Liverpool Vision

Name and position

Brenda Smith

Board Member

Council Member Member Member

Member Managing Director

Employee Non-Executive Director 2 Member Mayor and Elected Member

Manchester Chamber of Commerce and

North West Vision

The University of Manchester

Business in the Community

Ascent Media Group Limited

UMIST

English Partnerships

North West Regional Assembly

Trafford Metropolitan Borough Council

Dr Pauleen Lane

Board Member

Learning & Skills Council (Cumbria)

Learning & Skills Council (Merseyside)

Board Member

Robert Johnson

Liverpool John Moores University

The World of Glass (St Helens) Ltd

The Mersey Partnership

St Helens Chamber of Commerce

Maureen Williams

Board Member

St Helens Metropolian Borough Council

Member 2

(Governance)

Visiting Professor of Sociology

Board of Governors

Pro Chancellor and Chair of

Chair and Director

Board Member

Member

Leader

Member

Campus Ventures

Marie Rimmer CBE

Member

University of Salford

Industry

Non-executive Deputy Chair

Granada Television Limited

Director 2

Position

(b) Board members (continued)

31. Related party transactions (continued)

Notes (continued)

made

Payments

759,981

8,184

Grant claims

882

4,284 159,736

1,081,665 134,127 193

856,133 2,397,524 54,000

532,919

4,827,914 176,632

3,054,440

84,049

293,912

106,310

2,544,939

Grant claims

1,446;051

Grant claims

Goods and Services, Grant claims

Grant claims

Goods and services

Grant claims

Goods and services

Grant claims

Nature of transaction

495,873 144,123

ÂŁ

Agency Organisations

Income to the

Annual report and financial statements Year ended 31 March 2005

Northwest Regional Development Agency

Chief Executive Director Board Member 2

Director

Member Member

Myerscough College

Lancashire Business Link

Learning & Skills Council (Lancashire)

Rural Regeneration Cumbria

Lancaster University

Cumbrian Tourist Board

Board Member

David Brockbank

Board Member

Director

Lantra

Professor John Moverley OBE

Learning & Skills Council (National)

Board Member

Notes

Salford City Council

John Merry

NWDA Representation

Indirect interest

Marketing Manchester

Learning & Skils Council (Manchester)

MIDAS

Leader

Cumbria Community Foundation Cumbria Rural Enterprise Agency

Board Member

Director

Member

Director

Board Member 2

Chairman Vice Chairman

Lancaster University

Peter Hensman

Deputy Pro-Chancellor 1

Chairman Council Member

Envirolink (North West) Ltd

Board Member

ENCAMS

Chairman and Member 2

Mersey Basin

Joe Dwek CBE

8,184

416

Grant claims

Grant claims Grant claims Grant claims

956,020 2,130,877 224,200 801,357 5,759,871 2,201,592

Grant claims

349,648 999,445

Grant claims

759,981

4,218,353 152,708

5,759,871 25,000 677,518

Grant claims

48,859

Grant claims

Goods and services. Grant Claims

Grant claims

Nature of transaction

176

449.974 1,476,903

349.648

Member 2

Learning & Skills Council (Manchester)

Dave McCall

Board Member

Agency Organisations

Position

Related Party

ÂŁ ÂŁ

Payments

Income to the made to

Name and position

(b) Board members (continued)

31. Related party transactions (continued)

Notes (continued)

Annual report and financial statements Year ended 31 March 2005

Northwest Regional Development Agency

Northwest Regional 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 Northwest Regional 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: a) Executive Non-Departmental Public Bodies Annual Report and Accounts

Guidance2 published by HM Treasury and as amended from time to time;

b) Other g첫idance 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. This direction shall be produced as an appendix to the annual accounts. This direction replaces that dated 26 March 2002.

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

A Grade 3 officer in the 10 March 2004

Department of Trade and Industry

2 http://ww.h m-treasu iy ,gov, uklmedia/C693F / ACF DAD, pdf