BEIS annual report and accounts 2018 to 2019 (web-optimised PDF)
Source: data.gov.uk (2020-10-06)

BEIS annual reports and accounts. This series brings together the annual reports and accounts for the Department for Business, Energy and Industrial Strategy (BEIS).
The reports review the department’s activities over the course of each year, providing:
highlights of key projects
progress made in meeting the department’s objectives
financial information

Annual report
and accounts
2018-19

Annual report
and accounts
2018-19
Accounts presented to the House of Commons pursuant to Section 6(4) of the
Government Resources and Accounts Act 2000
Annual Report presented to the House of Commons by Command of Her Majesty
Ordered by the House of Commons to be printed 11 July 2019
HC 2386

© Crown copyright 2019
This publication is licensed under the terms of the Open Government
Licence v3.0 except where otherwise stated. To view this licence, visit
nationalarchives.gov.uk/doc/open-government-licence/version/3.
Where we have identified any third party copyright information you will
need to obtain permission from the copyright holders concerned.
This publication is available at: www.gov.uk/government/publications.
Any enquiries regarding this publication should be sent to us at:
Department for Business, Energy & Industrial Strategy
1 Victoria Street, London. SW1H 0ET
Tel: xx-xxxx-xxxx Email: xxx@xxx.xx
ISBN 978-1-5286-1056-8
CCS0319869997
07/19
Printed on paper containing 75% recycled fibre content minimum.
Printed in the UK by the APS Group on behalf of the Controller of Her
Majesty’s Stationery Office.

Contents
Performance report
6
Overview
7
Foreword by the Secretary of State
7
Report of the Permanent Secretary
8
Our highlights in 2018-2019
9
Our purpose
11
What we are aiming to achieve
11
Our business model
12
How we are organised: our organisational
structure
13
How we are organised: our group
14
Where we spent our money in 2018-19
15
Risks affecting delivery of our objectives
17
Performance analysis
21
Our performance in 2018-19
21
UN sustainable development goals
30
Financial review
36
Sustainability report
45
Other required performance reporting
48
Accountability report
50
Statement of Accounting Officer’s
responsibilities
51
Directors’ report: our leadership team
52
Governance statement
54
Staff report
65
Remuneration report
80
Statement of Parliamentary Supply
89
Parliamentary accountability disclosures 100
Audit report
108
Financial Statements
112
Consolidated Statement of
Comprehensive Net Expenditure
113
Consolidated Statement of
Financial Position
115
Consolidated Statement of Cash Flows 118
Consolidated Statement of Changes
in Taxpayers’ Equity
120
Notes to the Accounts
123
Trust Statement
226
Accounting Officer’s foreword to
the Trust Statement
227
Statement of Accounting Officer’s
responsibility for the Trust Statement
232
Audit report
234
Statement of Revenue, Other income
and Expenditure
237
Statement of Financial Position
238
Statement of Cash Flows
239
Notes to the Trust Statement
240
Annexes
248
Annex A: Common core tables
249
Annex B: Glossary
258

Performance
report
BEIS delivered phase 2 of the Shared Parental Leave
campaign in 2018-19, to raise awareness to employees and
employers and increase its uptake among parents.

Performance report
7
Overview
This section gives a summary of our department, its purpose, the key risks to the achievement of its
objectives, and how it has performed during the past year.
Foreword by the Secretary of State
As we enter the third year of this department, I am immensely proud of
our achievements. I am also very grateful for the hard work of my officials,
ensuring the UK is best placed for economic growth and prosperity in this
time of change.
For our modern Industrial Strategy, this year has been one of
delivery. We have agreed ten Sector Deals catalysing private investment
in the industries of the future. This includes over £1.5 billion co-investment
in solving the most pressing medical challenges, establishing the UK as
a leader in innovative new battery technologies, and a plan to boost the
UK’s Offshore Wind export potential five fold to £2.6 billion per annum.
We have also launched the first of many Local Industrial Strategies to build
prosperous communities across the country.
The government is supporting workers now and for the jobs of the
future, with the biggest reforms to labour market regulation in a
generation. We have seen record employment this year while increasing
focus on improving the quality of work. We are committed to providing
not only jobs with fair employment practices, but those that develop
skills throughout people’s careers and are suited to the needs of future
sectors. We have also increased the National Living Wage and Resolution
Foundation research shows the share of workers on low pay is at its lowest
level since the 1980s.
We are working to ensure the UK remains a great place to do
business, while re-building consumer trust in markets. We are
continuing our reform of corporate governance and the audit industry, to
improve diversity and accountability in boardrooms. We published the
National Security and Investment white paper, proposing an effective
security regime for foreign investment. We have also provided more than
£5.5 billion to thousands of small and medium businesses through the
British Business Bank, to boost entrepreneurs across the country.
Clean growth and addressing climate change are at the heart
of our Industrial Strategy and future prosperity, as evidenced
by legislating to achieve net zero greenhouse gas emissions.
In response to the Dieter Helm Cost of Energy Review I set out the
government’s vision for a fair, low-carbon and efficient energy market. The
Tariff Cap now means that every household is protected whether through
the cap or through our measures to make switching suppliers easier.
Our ongoing support for the UK renewables sector, including the Sector
Deal in off-shore wind generation, has strengthened our de-carbonisation
commitment and we have now seen the first fortnight without coal power in
the UK since the start of the industrial revolution.
Looking forward, we will continue to deliver our modern Industrial Strategy,
work together with and advocate for businesses, workers and consumers,
and build an economy that works for everyone as we leave the EU.
The Rt Hon
Greg Clark MP
Secretary of State
for Business, Energy
and Industrial Strategy

Annual report and accounts 2018-19
8
Report of the Permanent Secretary
BEIS is at the heart of the government’s commitment to build an economy
that works for everyone, with great places across the UK for people to work
and for businesses to invest, innovate and grow.
In the last year we celebrated the first anniversary of our Industrial
Strategy. We have made great progress across the five foundations
of productivity: ideas, people, infrastructure, business environment and
places. We created UK Research and Innovation to bring together our
research agenda and accelerate commercialisation as drive towards our
2.4% investment target by 2027. Most recently, we agreed the 10th Sector
Deal with key industries, helping to create thousands of high-quality, high-
skilled jobs across the country.
We used the Industrial Strategy as a framework for our EU Exit
preparations. Together with our Partner Organisations, we prepared for deal
and no-deal outcomes, ensured our legislative and international obligations
were in place and worked with businesses, workers and consumers to
keep them informed, gather their views, and help them prepare.
We also continue to focus on creating a regulatory framework to
support competitive markets, make the UK a great place to start and run a
business, and give both workers and consumers a fair deal. In December
2018 we published the Good Work Plan, outlining our vision for the future
of the UK labour market. BEIS policies will protect workers’ rights, ensure
fair pay and increase transparency in the business environment.
In the energy sector, Ofgem’s implementation of the Tariff Cap protects
vulnerable consumers, whilst the smart meter rollout enables consumers to
take better control of their energy use. We hosted the first ever Green Great
Britain Week to showcase low-carbon technologies and meet the Clean
Growth Challenge. A third of UK electricity was generated by renewable
resources in March 2019. As part of our global climate leadership, we also
funded projects to support 47 million people to cope with the effects of
climate change.
Finally, last year we completed our corporate Transformation programme,
and launched a new plan for Organisational development, to build a
flexible, innovative, collaborative and business facing department. This
includes our commitment to increase representation of BAME staff, people
with disabilities and LGBT+ staff at all grades, within BEIS and our Partner
Organisations, to reduce our gender pay gap and support social mobility
and progression.
I am proud to lead a department made up of such talented, hard-working
and professional people. In a fast-changing and challenging environment,
we will need to continue to give our best.
Alex Chisholm
Permanent Secretary
and Principal
Accounting Officer

Performance report
9
Our highlights in 2018-2019
£1.1 billion allocated in the 2018 Autumn
budget to fund research in quantum
technologies, clean growth and decarbonisation,
mobility and ageing, and artificial intelligence.
Launched the Grand Challenge Missions:
using AI to treat diseases, helping people
enjoy at least five extra years of healthy
life by 2035.
Government and industry committed to ten
Sector Deals, the most recent on offshore wind.
Place the UK at the forefront of new automotive
technology development, investing in electric
vehicle R&D and supply chain competitiveness.
The National Living Wage increased to £8.21
in April 2019. This above-inflation increase is
expected to benefit 1.8 million people.

The Good Work Plan set out the vision of the
future of the UK labour market, the biggest
upgrade to workers’ rights in a generation.

Annual report and accounts 2018-19
10
Through the British Business Bank, we
supported over 78,000 smaller business with
more than £5.5 billion.
A landmark speech by our Secretary of State
outlined the four principles of the power sector
for a market-led approach to future energy
policy development.
The first Green Great Britain Week
demonstrated how clean growth technologies
are driving job creation and tackling
climate change.
The Domestic Gas and Electricity (Tariff
Cap) Act 2018 came into force on 1 January
2019, to protect millions of energy customers
across England, Wales and Scotland.
We continued to prepare for EU Exit and
legislated for a new nuclear safeguards regime -
one of the first pieces of EU Exit legislation and
putting the UK on track to meet its international
obligations on day one of exit.
We completed our Transformation
programme and developed a new plan for
Organisational development to continue to build
a flexible, innovative, collaborative and business-
facing department.

Performance report
11
Our purpose
Our vision is an economy that works for everyone – with great places in every part of the UK for people
to work and for businesses to invest, innovate and grow.
What we are aiming to achieve
Deliver an ambitious industrial strategy
We will develop a modern, long-term industrial strategy that lays the foundations
for reinvigorating UK economic performance and boosts earning power throughout
the country. We will cultivate world-leading science and innovation, build on local
strengths and foster enterprise to ensure every place meets its potential.
Maximise investment opportunities and bolster UK interests
as we leave the EU
We will deliver the best results for the UK from exiting the EU by creating a world
class business environment that drives investment and employment. As we build
our new relationship with the EU we will maintain business and investor confidence
and ensure their interests are reflected in the negotiations.
Promote competitive markets and responsible business practices
We will secure better outcomes for consumers by creating a more competitive
environment for business and industry. We will improve corporate governance and
ensure the labour market offers everyone the opportunity to obtain quality, well-
paid jobs and better working conditions.
Ensure the UK has a reliable, low cost and clean energy system
We will upgrade and diversify our energy supplies to meet future needs – ensuring
they are smarter, cleaner, more secure and affordable for consumers and businesses.
We will promote clean growth and take action to tackle climate change, working in
partnership with business and international communities.
Building a flexible, innovative, collaborative and business facing department
We will elevate BEIS from a well-functioning department to an exceptional one which
delivers for business on our strategic priorities in relation to the Industrial Strategy,
EU exit, and clean growth. We will enable digital, data and technology to deliver
exceptional services for our staff as well as the people and businesses we serve.

Annual report and accounts 2018-19
12
Our business model
Our work and stakeholders
Following ministerial priorities, we design and implement policy
relating to: the government’s Industrial Strategy; business; science
and innovation; energy and clean growth; and climate change. We
build strong and collaborative relationships with all our stakeholders
including: businesses and business representative organisations;
workers and their unions; and consultations with the wider public.
We also work closely with our partner organisations and other
government departments.
3,776 people
Our people
Our core Department is made up of 3,776 people with regional
offices across the UK. We are organised in seven groups; each
led by a Director General, and these groups are in turn divided into
40 Directorates.
40 partner
organisations
Our partner organisations
We also deliver our business through 40 partner organisations
that employ more than 30,000 public servants. Our network of
partner organisations is one of the largest in government, with a
wide span of policy and operational responsibilities. These range
from large organisations such as UK Research and Innovation and
the Nuclear Decommissioning Authority, through medium-size
organisations working on regulation such as the Competition and
Markets Authority, to advisory committees including the Committee
for Climate Change.
£12.1 billion
Our funding
Our annual funding is agreed with Treasury and Parliament. In 2018-
19, we were responsible for the efficient stewardship of £12.1 billion
of departmental funds.

Performance report
13
Our ministers
Our management:
non-executives
Our management: executives
Minister of State
for Energy and
Clean Growth
The Rt Hon
Claire Perry MP
Director General,
EU Exit & analysis
Sam Beckett
Director, Policy
Delivery &
Private Office
Caleb Deeks
Director General,
Market Frameworks
Jaee Samant
BEIS
Scientific Adviser
Professor
John Loughhead
Acting Director
General, Industrial
Strategy, Science
and Innovation
Sam Lister
Chief Financial Officer
Tom Taylor
Director,
Organisational
Development
Doug Watkins
Director General,
Energy & Security
Joanna Whittington
Director General,
Corporate Services
Sarah Harrison
Acting Director
General, Business
Sectors
Gavin Lambert
Director
General, Energy
Transformation &
Clean Growth
Julian Critchlow
Chief
Business Adviser
Nick Chism
Parliamentary Under
Secretary of State,
Minister for Business
and Industry
Andrew Stephenson MP
Parliamentary Under
Secretary of State
The Rt Hon Lord Henley
Minister of State
for Universities,
Science, Research
and Innovation
Chris Skidmore MP
Parliamentary Under
Secretary of State,
Minister for Small Bus-
iness, Consumers
and Corporate
Responsibility
Kelly Tolhurst MP
Lead non-
executive
board member
Archie Norman
Non-executive
board member
Nigel Boardman
Non-executive
board member
Stephen Carter
Non-executive
board member
Carolyn McCall
Non-executive
board member
Leena Nair
Non-executive
board member
Kathryn Parsons
Non-executive
board member
Stuart Quickenden
Secretary of State for Business, Energy and Industrial Strategy
The Rt Hon Greg Clark MP
Permanent Secretary and Accounting Officer
Alex Chisholm
How we are organised: our organisational structure

Annual report and accounts 2018-19
14
How we are organised: our group
Public sector bodies can be grouped by level of control the core Department has over them.
• Our executive agencies act as an arm of the core Department, undertaking executive functions,
rather than policy advice.
• Other bodies in the Departmental Group are separate legal entities, but the core Department
usually sets their strategic framework, appoints the chair and all non-executive members of board,
and is consulted on the appointment of the CEO.
• The wider Departmental Group includes other public-sector bodies which work to achieve our
objectives but have more authority over their policies and are not consolidated into the group financial
statements. See our Accounting Officer System Statement, published separately, for greater detail.
1
These entities have been re-classified by ONS in 2018-19. See footnote 2 in note 28: list of bodies within the
Departmental Group, for an explanation of the impact of this change.
Wider departmental group
British Hallmarking Council
National Nuclear Laboratory
British Nuclear Fuels Limited
National Physical Laboratory
Committee on Climate Change
Nuclear Liabilities Fund
Companies House1
OFGEM
Competition & Markets Authority
Ordnance Survey
Groceries Code Adjudicator
Pacific Nuclear Transport Limited
Independent Complaints Reviewer
Post Office Ltd
Intellectual Property Office
Pubs Code Adjudicator
Land Registry1
Small Business Commissioner
Met Office
Consolidated Departmental Group
Advisory, Conciliation and Arbitration Service (ACAS)
Electricity Settlements Company
British Business Bank Plc
Financial Reporting Council
Central Arbitration Committee
Low Carbon Contracts Company Ltd
Certification Officer
Nuclear Decommissioning Authority
Civil Nuclear Police Authority
Oil and Gas Authority
Coal Authority
UK Atomic Energy Authority
Committee on Radioactive Waste Management
UK Green Infrastructure Platform Ltd
Competition Appeal Tribunal
UK Shared Business Services Ltd
Competition Service
UK Research and Innovation
Core Department and agencies
Committee on Fuel Poverty
Nuclear Liabilities Financing Assurance Board
Copyright Tribunal
Office of Manpower Economics
Council for Science and Technology
Office of Product Safety and Standards
Government Office for Science
Office of the Regulator of Community Interest
Industrial Development Advisory Board
Companies
Insolvency Service
Regulatory Policy Committee
Low Pay Commission
UK Space Agency

Performance report
15
Where we spent our money in 2018-19
2
This expenditure corresponds to the net total DEL expenditure for our Departmental Group. DEL is the controllable
budget total, issued by HM Treasury on behalf of Parliament, that we use to fund delivery of our strategic objectives.
It excludes AME expenditure which represents volatile, demand-led spend and technical accounting matters. These
concepts are fully explained on page 36.
For the year ending 31 March 2019, the
Departmental Group incurred a spend of
£12.1 billion2. Of this £1.4 billion related to
the core Department and agencies, and £10.7
billion related to our partner organisations.
The diagram on the next page shows the major
areas of spend. The majority of the department’s
spend, and policy delivery is through it’s Partner
Organisations, including:
• £7,625 million by UK Research and
Innovation (UKRI), on funding for Science
and Research
• £2,200 million by the Nuclear
Decommissioning Authority (NDA)
on managing our energy legacy safely
and responsibly.
• £347 million by UK Space Agency (UKSA)
on delivering an excellent space programme
with the maximum economic, scientific and
policy benefit for the UK.
• £208 million by the British Business Bank
(BBB) on supporting small businesses in the
UK at all stages of their development.

Annual report and accounts 2018-19
16
Core Department
Executive agencies
Partner organisations
UKSA
£347m
Insolvency
Service
£25m
BBB
£208m
Diamond Light
Source Ltd
£113m
UKAEA
£69m
ACAS
£51m
Partner organisations
- Other
£5m
Coal Authority
£29m
UK SBS Ltd
£33m
Delivering
affordable
energy for
households
and businesses
£77m
Core Department
- Other
£2m
Managing our
energy legacy
safely and
responsibly
(£219m)
Maximise
investment
opportunities
and bolster
UK interests
£315m
Deliver an ambitious
industrial strategy
£128m
Taking action on
climate change and
decarbonisation
£98m
Science and
Research
£220m
Government as
Shareholder
£214m
Promote competitive
markets and responsible
business practices
£96m
Capability
£424m
Where we spent our
money in 2018-19
£12,060m
UKRI
£7,625m
Nuclear
Decommissioning
Authority
£2,200m

Performance report
17
Risks affecting delivery of our objectives
Our risk management framework continued to develop and improve over the last year. A detailed
narrative is provided in the governance statement section of this report. The table below describes our
risk profile: principal risks we have faced during the year and the mitigating actions taken.
Relative
severity

High

Medium

Low
Change during
the year

Increasing risk

Stable

Decreasing risk
H
L
M
Key: Icons in the table map the risks to our objectives
Delivering an ambitious
industrial strategy
Maximising investment
opportunities and bolstering
UK interests
Promoting competitive
markets and responsible
business practices
Ensuring the UK has a
reliable, low cost clean
energy system
Building a flexible, innovative,
collaborative and business
facing department

Annual report and accounts 2018-19
18
Risk
Mitigating activities
Direction of risk
trend at year end
BEIS may fail to prepare for the
challenges and opportunities
of leaving the EU and the post
EU Exit environment, leading
to an adverse impact for the
UK economy.
Risks
1, 3, 4
f
f Established a clearly defined EU Exit Senior Reporting
Officer (SRO) led portfolio with effective oversight,
governance and decision-making structures.
f
f Successfully accelerated delivery in 18-19 in
preparation for all scenario Exit on 29 March 2019.
f
f Comprehensive internal and external assurance
programme, with 46 internal and external reviews
concluded across the portfolio (IPA, GIAA and NAO).
f
f Supported negotiation of the withdrawal agreement.
H
As a result of political
uncertainty and potential
economic upheaval following
EU Exit, which could be
compounded by a challenging
Spending Review for the
Strategy, there is a risk that
partners across government,
local areas and industry will not
sufficiently engage with and
support the Industrial Strategy.
Risks 1, 2, 3, 4
f
f Close engagement across government to ensure
development of wide-ranging, ambitious proposals,
ensuring Spending Review bids by departments are
aligned with the Industrial Strategy.
f
f Work with ministers, No.10, and HM Treasury to
define ambition and ensure resources are available for
implementation.
f
f Use cross-Government Programme Board, Cabinet
Committee and partnerships with local government,
Local Enterprise Partnerships, businesses, civic
society and academia to drive implementation and
measure the impact on the economy.
f
f Work closely with EU Exit colleagues recognising the
potential synergies with Industrial Strategy, and to
remain aware of how the negotiations could affect our
ability to improve productivity and drive growth across
the whole country.
f
f Effectively engage with UK industry and business
through events and comprehensive communications.
M
A significant incident affects
a higher risk nuclear site or
key energy infrastructure. This
could cause harm to people,
energy systems or disrupt
energy supplies.
f
f We have strengthened cyber-security systems,
to ensure continuous monitoring and response
capability to cyber threats as they occur.
f
f We have collaborated with the office for Nuclear
Regulation and the Civil Nuclear Constabulary to
strengthen regulatory frameworks and maintain safety
and security.
f
f We have brought in new emergency planning
regulations in line with international best practice.
L
As a result of ineffective
measures to mitigate climate
change we fail to create
adequate, affordable, reliable
access to clean energy for
households and business.
Risk 4
f
f We refined analysis on projected future emissions
and identified potential contributions of different
policy areas.
f
f We developed and implemented a range of further
policies to deliver emission reductions in line with
Clean Growth Strategy commitments.
f
f We commissioned the Committee on Climate Change
report on our long-term greenhouse gas emission
targets (which was published in May 2019).
M

Performance report
19
Risk
Mitigating activities
Direction of risk
trend at year end
We fail to adapt employment
legislation leading to a rise in
unfair employment practices
and a failure to deliver ‘good
quality work’.

f
f We have progressed consultations and preparation of
clauses to deliver on ‘Good Work Plan’ commitments.
f
f We have developed robust quality of work metrics.
f
f We collaborated with DfE to monitor the development
and implementation of skills reform programmes,
e.g. national retraining schemes, apprenticeships
devolution of the adult education budget and T-levels.
M
BEIS information is lost or
compromised through cyber-
attack, theft, mistakes or leaks,
or a security incident at work
harms BEIS ministers, staff
or visitors.
f
f We continue to develop a culture of security through
multi-channel staff awareness campaigns to reinforce
simple and important security behaviours – technical
and physical defences are not enough on their own.
f
f We are building a more coherent approach to
personnel security to mitigate the insider threat
and minimise the security vulnerabilities caused by
staff mistakes.
f
f We are implementing a risk-adjusted assurance
programme for partner organisation security, and have
instituted fora to share best practice and oversee risk.
f
f We are recognised across government as a lead
adopter of active cyber defences and have secured
Cabinet Office funding to test them.
H
We may fail to attract,
develop and retain sufficiently
skilled staff and support
their wellbeing leading to an
inability to deliver our business
objectives.
f
f We have ensured senior leaders maintain oversight
of teams, tracking that leave is taken, hours worked
are proportionate and flexible working options are
considered.
f
f We developed workforce and resourcing plans
to identify preferred approaches to attract and
retain staff.
f
f We developed a competitive pay and
retention strategy.
M
Stable, medium risk

Annual report and accounts 2018-19
20
Risk
Mitigating activities
Direction of risk
trend at year end
Due to challenges in achieving
our business plans we do
not deliver some strategic
objectives.
f
f We have conducted zero based reviews, allowing
senior leaders enough time and insight to prioritise
and support negotiations with HM Treasury.
f
f We have reprioritised our activities and identified other
cost reduction options.
f
f We have strengthened business planning processes,
ensuring budgets remain aligned with our strategic
objectives.
M
Stable, medium risk
We may lack the organisational
agility to respond effectively
to the external environment,
leading to an inability to drive
economic growth across the
UK.
f
f We have developed a prioritisation framework to
support strategic decision-making.
f
f We have a dedicated team developing our Target
Operating model, to enable improved delivery of our
business strategy and Single Departmental Plan.
f
f We continued to identify future trends through horizon
scanning of our external environment and recruited
people with the necessary commercial, technical and
operational skills.
M
Evidence base underpinning
policy development and
delivery is inadequate in
terms of availability, quality, or
understanding.
f
f Implementing the updated Green Book guidance to
enhance evidence-based appraisal and evaluation of
policy proposals.
f
f Developing the Central Archive for Monitoring
and Evaluation Online database, to improve data
accessibility and support better analysis and policy
decision making.
f
f We improved departmental training and quality
assurance modelling processes
f
f External assurance from the National Audit Office on
our modelling processes.
M
Stable, medium risk

Performance report
21
Our performance in 2018-19
Throughout 2018-19, the department has been
preparing for EU Exit across all scenarios. This
included directly supporting the HM Government
negotiation of the Withdrawal Agreement with
the EU as well as preparing for a March 2019 “no
deal” Exit.
To prepare for EU Exit, the department
delivered:
• the necessary legislation to support EU
Exit - the Nuclear Safeguards Act obtained
Royal Assent in June 2018, and 100% of
the department’s priority No Deal Statutory
Instruments (SIs) were laid before the original
exit day (29 March), (63 SIs).
• all the new replacement international
agreements within its remit, prioritised in the
event of no deal exit. These are civil nuclear
safeguards agreements with the International
Atomic Energy Agency (IAEA) and nuclear
cooperation agreements with Canada, US,
Australia and Japan, ensuring the continuity of
civil nuclear trade after Exit. BEIS agreements
not prioritised for no-deal include civil nuclear
research, competition and intellectual property.
• 28 technical notices, including oil and gas,
climate change, company law and state aid.
These notices include guidance about what
actions businesses need to take in order to
carry on exporting and importing a range of
goods and services.
• Mobilised the department in the run up to
March 2019 to be prepared for a “no deal”
Exit scenario.
• Nine dedicated weekly EU Exit business
readiness forums up to 28 March (chaired
by the BEIS Director of EU Exit Business
Readiness) with business intermediaries:
attended by over 70 business intermediaries
and representative organisations; two further
forums were held following the extension of
Article 50.
Departmental resources:
• BEIS initially secured £185.1 million from HM
Treasury in 2018-19 for EU Exit preparations,
including no deal. Following Q2 Supplementary
Estimates, BEIS’ budget allocation was revised
to £139.5 million.
• For 2019-20 BEIS has been allocated £190
million for all EU Exit preparations.
• At the time of publishing, BEIS has circa
1,030 FTEs exclusively working on EU Exit;
including 79 dedicated programme and
project management specialists, and 122
digital experts including 17 digital specialists
from GDS.
• BEIS mobilised over 500 staff on a short-term
basis within the department, to support ramp
up of No Deal contingency activities. This
involved temporarily moving staff working on
other BEIS objectives to support no deal EU
Exit preparations.
Impact of EU Exit on other objectives:
BEIS prioritised EU Exit preparations, as
requested by the Cabinet, to ensure appropriate
contingencies were in place for March 2019. In
parallel, the department continued delivering
its departmental objectives with constrained
resources, the department’s performance
against its objectives is detailed below.
Performance analysis

Annual report and accounts 2018-19
22
We report our performance against the 2018-19 BEIS Single Department Plan (SDP). The indicators
are used as part of a combination of evidence to assess the delivery of the department’s priorities.
The tables below includes our performance and the latest position against each indicator in the SDP.
1. Deliver an ambitious industrial strategy
Indicators are being developed by the independent Industrial Strategy Council, which held its
inaugural meeting on 1 November 2018.
1.1 Build a Britain fit for the future
The Industrial Strategy outlines a long-term plan to boost
productivity and earning power of people in the UK by focusing
on 5 foundations of productivity: ideas, people, infrastructure,
business environment and places.
In 2018-19:
• Business Secretary Greg Clark appointed Andy Haldane as
Chair of the Industrial Strategy Council - an independent body
established to assess the government’s delivery of the Industrial
Strategy; and
• We published the Good Work Plan, which sets out our vision for
the future of the UK labour market.
1.2 Support world leading sectors
In 2018-19, we:
• Launched the Nuclear Sector Deal, worth over £200million,
which will spearhead cleaner economic growth and promote
innovation to develop the technology and skills to maintain the
UK’s position as one of the leading nuclear nations;
• Published the Second Life Sciences Sector Deal which
contains significant action to transform the prevention,
diagnosis and treatment of chronic diseases by 2030. It
deepens our partnership with industry, universities and
charities and demonstrates how the NHS is pivotal as a delivery
partner; and
• Published the Aerospace Sector Deal in December, which
positions the UK to take advantage of the global move towards
hybrid-electric and electric propulsion and exploit emerging
markets such as drones and Urban Air Mobility.

Performance report
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1.3 Invest in science and innovation
In 2018-19, we:
• Launched a public consultation on the new Knowledge
Exchange Framework which will benchmark universities’
effectiveness at fostering knowledge sharing and research
commercialisation; and
• Published the Artificial Intelligence Sector Deal, a 0.95
billion package of support for the sector – during 2018-19
we announced: £100 million to deliver 1,000 new PhDs; a
prestigious Turing AI fellowship scheme; new industry funded AI
masters places; a chair for the new AI Council; and research to
explore data trusts.
1.4 Support business to start and grow
In 2018-19, we:
• Secured £31 million of new funding to deliver an £11 million
leadership programme for SMEs and £20 million to strengthen
local networks;
• Launched the Business Basics Fund 2 which provides up to £2
million for trials to build evidence on how to encourage SMEs
to adopt productivity boosting technology or management
practices; and
• Announced an artificial intelligence memorandum of
understanding with Japan, which creates a new UK-Japanese
research programme to help treat patients with chronic
degenerative diseases.
1.5 Drive growth across the country
In 2018-19, we:
• Published the policy document ‘Strengthened Local Enterprise
Partnerships’ in July. This set out how government and Local
Enterprise Partnerships (LEPs) will work together to strengthen
leadership and capability, improve accountability, manage risk
and provide clarity on geography; and
• Published a policy prospectus on Local Industrial Strategies
which sets out the objectives and approach to developing
local strategies.

Annual report and accounts 2018-19
24
2. Maximise investment opportunities and bolster UK interests as we leave the EU
2.1 Promoting interests of UK businesses in EU Exit negotiations
In 2018-19, we:
• Worked to secure the right outcome for the UK research base
as we exit the EU; and
• Supported the work of the Department for International Trade
and the Department for Exiting the EU to ensure the UK can
maximise future trading opportunities with the EU and other
countries to support delivery of our Industrial Strategy.
2.2 Encouraging inward investment
In 2018-19, we:
• Ensured the UK seizes opportunities for investment – each
Industrial Strategy Grand Challenge (AI and Data, clean
growth, future of mobility and ageing society) represents an
open invitation to business, academia and civil society to work
together to ensure the UK seizes these opportunities.
Business investment in the UK (£bn)

Dec 2018
Dec 2017
Dec 2016
46.7
46.2
43.5
Source: Business investment in the UK:
October to December 2018; release schedule:
quarterly
Number of Inward investment projects involving
Department for International Trade, BEIS,
and others
2018
2017
1,682
1,859
Source: DIT annual report and accounts 2017
to 2018; release schedule: annual
2.3 Ensuring our economy is resilient and seizing opportunities
In 2018-19, we:
• Announced the second wave of six Local Industrial Strategies:
Cheshire & Warrington, Heart of the South West, Leicester
& Leicestershire, North East, Tees Valley and West of
England; and
• Announced the entire country will benefit from Local Industrial
Strategies with the rest of the LEPs forming the final third wave.

Performance report
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2.4 Building the profile of the UK on the international stage
In 2018-19, we:
• Engaged internationally to ensure our Industrial Strategy is well
understood globally and benefits from the experience of our
international partners; and
• Progressed the investment of £300 million over the next three
years in growing and attracting world-class talent.
Between 2011-12 and 2017-18, it is estimated
ICF programmes have:
• Supported 47 million people to cope with
the effects of climate change;
• Provided 17 million people with improved
access to clean energy;
• Reduced or avoided 10.4 million tonnes of
greenhouse gas (GHG) emissions (tCO2e);
• Installed 590 MW of clean energy
capacity; and
• Mobilised £3.3 billion public and £910 million
private finance for climate change purposes
in developing countries.
Source: 2018 UK climate finance results;
release schedule: annual

3. Promote competitive markets and responsible business practices
3.1 Reforming corporate governance
In 2018-19, we:
• Completed implementation of the measures announced in
response to the first consultation on corporate governance
reform, with only the publication of research on share buyback
outstanding, due to take place next year – we also published
our proposals in response to the consultation on insolvency &
corporate governance;
• Ran a public consultation on the Registration of Overseas
Entities Bill, which will establish a new ownership register of
overseas entities that own UK property – following consultation,
the draft bill was submitted for pre-legislative scrutiny;
• Responded to the ‘Independent review of the Financial
Reporting Council’;
• Initiated the Brydon Review of the Future of Audit, and the
CMA’s study on the statutory audit market; and
• Continued to support the Hampton-Alexander Review into
FTSE women leaders.
FTSE 350 board positions held by women
Oct 2018
Oct 2017
26.7%
24.5%
Source: Hampton-Alexander review - FTSE
women leaders 3rd report, Improving gender
balance in FTSE leadership, November 2018;
release schedule: annual.

Annual report and accounts 2018-19
26
3.2 Promoting fairness in the labour market
In 2018-19, we:
• Continued to build on the recommendations of the Matthew
Taylor review to improve employment practices as well
as maintain flexibility for the employer – we published the
submissions to the review in May;
• Enacted new measures in April 2019 to give more people
access to payslips and information to help ensure they are
paid properly;
• Launched new campaigns to raise awareness of shared
parental leave and to help workers ensure they get their
holiday pay; and
• Enacted a rise in the National Living Wage from £7.83 to £8.21
per hour from April 2019, benefitting around 1.7 million people.
National living wage as a proportion of
median earnings

Apr 2018
Apr 2017
£7.83
(58.6%)
£7.50
(57.6%)
Source: National Minimum Wage, Low Pay
Commission 2018 Report.
3.3 Ensuring UK has the right regulatory frameworks
In 2018-19, we:
• Published the consultation on modernising consumer markets
which sought views on how to provide a better service and
more protection to consumers when they interact with markets;
• Delivered seminars to local trading standards authorities
looking at how product recall is enacted and how businesses
engage with them – 250 local authority trading standards staff
have received training; and
• Published the government response to the ‘Brexit: competition
and state aid’ report in April and it was debated in May.
3.4 Safeguarding UK interests in investments in national
infrastructure
In 2018-19, we:
• Published the draft ‘Statutory statement of policy intent’
on national security and investment and completed a white
paper consultation seeking views on proposed reforms to
government’s powers for scrutinising investment for the
purposes of protecting national security; and
• Published the ‘National security and infrastructure investment
review’ which provided a summary of responses to the
government’s consultation on long-term reform proposals.

Performance report
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4. Ensuring the UK has a reliable, low-cost and clean energy system
4.1 Maximise the advantages from the global shift to clean
growth for UK industry, through the new Clean Growth Grand
Challenge
In 2018-19, we:
• Held the first Green Great Britain Week on 15–19 October 2018,
to highlight the opportunities clean growth offers and raise
awareness of how business and the public can contribute to
tackling climate change;
• Published ‘Clean growth: transforming heating - overview of
current evidence’, which provided an overview of key issues for
achieving long-term heat decarbonisation;
• Announced the first two missions under the Clean Growth
Grand Challenge – to halve the energy use of new buildings
by 2030, and to deliver a net zero emission carbon industrial
cluster by 2040; and
• Launched the Heat Networks Investment Project (HNIP),
providing up to £320 million of capital funding over three
years, for heat network projects in England and Wales. It aims
to increase the number of heat networks being built, deliver
carbon savings and create conditions for a sustainable heat
network market to develop.
Greenhouse gas emissions, MtC02e Target for
the second carbon budget from 2013-17: 2,782

2017
2016
473
460
498
516
556
2015
2014
2013
Source: 2017 UK greenhouse gas
emissions: final figures – data tables; release
schedule: annual
Electricity generation from renewable resources

2018
2017
33%
29%
Source: Energy trends: renewables; release
schedule: annual
4.2 Ensure our energy system is reliable and secure
In 2018-19, we:
• Maintained sufficient electricity capacity to exceed our statutory
reliability standard.
• Continued to make our electricity system smarter and more
flexible, creating the right environment for more storage,
demand side response, smart grids, and interconnection.
• Agreed with the European Commission in the draft Withdrawal
Agreement how to maintain the Single Electricity Market on the
island of Ireland, whilst preparing the energy system across the
UK for potential ‘no deal’ EU Exit; and
• Following legal challenges to and a suspension of the Capacity
Market, BEIS has worked with stakeholders, including the
European Commission, to reinstate the scheme. Our Statutory
Instrument to enable the T-1 auction was made on 9 April and
the auction is scheduled for summer 2019.
Gas system capacity: percentage of demand
that could be met if largest piece of gas
infrastructure failed, in a severely cold winter

2017
2016
2015
120%
127%
112%

Source: statutory security of supply report:
2018; release schedule: annual

Annual report and accounts 2018-19
28
4.3 Deliver affordable energy for households and businesses
In 2018-19, we:
• Published a call for evidence on ‘Helping businesses to improve
the way they use energy’ and we published our response; and
• Continued to work with industry to ensure every household
and small business in the country has been offered a smart
meter by 2020.
Number of smart and advanced meters
operating in homes and businesses across
Great Britain, millions

Mar 2019
Mar 2018
Mar 2017
13.8
11.1
6.8
Mar 2016
3.6
Source: statistical release and data: Smart
Meters, Great Britain, quarter 4 2018; release
schedule: quarterly
4.4 Manage our energy legacy safely and responsibly
In 2018-19, we:
• Updated the guidance on the decommissioning of offshore oil
and gas installations and pipelines in November 2018;
• Published an updated framework for the long-term
management of high activity radioactive waste to ensure safe,
cost effective and environmentally sensitive decommissioning
of our nuclear waste through a geological disposal facility in
October 2018; and
• Brought in new emergency planning regulations in line with
international best practice.
Nuclear Decommissioning Authority targets
completed or on track to complete

2018-19
2017-18
83% (150/181)
81% (92/113)

Source: Nuclear Decommissioning Authority
mid-year performance report
5. Build a flexible, innovative, collaborative and business facing department
5.1 People strategy
In 2018-19, we:
• Published the BEIS Workforce Strategy for 2019 to 2021
and agreed the terms of reference for the Workforce
Planning Group.

Performance report
29
5.2 Enabling digital, data and technology
In 2018-19, we:
• Embedded our IT platform, Cirrus, and launched a new intranet;
• Launched a new online reporting system for all our business
as usual work and portfolio to make the process for internal
reporting more efficient; and
• Ran a ‘Knowledge and Information Roadshow’, which visited
five locations across the country and encouraged BEIS staff
to be innovative with our new technology – ensuring good
knowledge and information management supports our policy
making and protecting information responsibly.
5.3 Deliver a workspace that supports and enables BEIS to
deliver its objectives
In 2018-19, we:
• Upgraded the CCTV in 1 Victoria Street to ensure the security
of all staff;
• Improved our room booking service, with a better self-service
user interface; and
• Launched a new procurement model, which is streamlined and
more user-friendly, enabling better analytics.
5.4 Using resources efficiently to deliver ministers’
strategic priorities
In 2018-19, we:
• Ensured that resources are appropriately allocated within the
department and used effectively in the delivery of this plan and
our priorities. Senior leaders have been provided with high-level
oversight and governance of business planning, budgets and financial
management; and performance reporting and risk monitoring; and
• Continued to meet the 5% cash management forecast
accuracy target set by HM Treasury and finished joint second
in the cross-government league tables with an average monthly
variance of 0.49%.
Annual People Survey score on organisational
objectives and purpose index

Oct 2018
Oct 2017
Oct 2016
80%
75%
52%
Source: BEIS: Civil Service people survey 2018;
release schedule: annual

Annual report and accounts 2018-19
30
Performance against United Nations sustainable
development goals
The Sustainable Development Goals (SDGs) succeed the Millennium Development Goals (MDGs),
which ended in 2015. They were developed by United Nations (UN) member states and include 17
global goals for 2016 – 2030. UK government departments are required to look within their single
departmental plans to identify policies and programmes which support delivery of the SDGs.
In summer 2019, the UK will present its voluntary national review of its delivery of the SDGs to the UN.
In preparing the review document, BEIS took the lead in co-ordinating the chapters for goals 7, 9 and
13. The table below provides a summary of BEIS’ delivery against the SDGs in 2018-19.
Sustainable development goals
Progress in 2018-19
Goal 1
End poverty in all its forms
BEIS delivery area

3.2 Promoting fairness in the labour market
New rates for the National Living Wage were implemented in April 2018 and
remain on-target to achieve the 2020 ambition to increase this to 57% of
median earnings.
Consultation seeking views on ethnicity pay reporting by employers closed in
January 2019 and the government response is being considered.
Goal 5
Achieve gender equality and empower
all women and girls
BEIS delivery area

3.1 Ensure businesses are run responsibly and transparently
We continued to coordinate and support the Hampton-Alexander Review into
FTSE women leaders. Female representation on FTSE 100 boards has risen
by 2.2% since last year and on FTSE 350 boards it has risen by 2.4% since
last year.
3.2 Promoting fairness in the labour market
Evaluation of the BEIS and Government Equality Office (GEO) £1.5 million
campaign to promote parental leave in Feb-Apr 2018 shows that it achieved
its targets.
We have delivered on a commitment in the government’s response to the
Taylor Review, and a previous concern of the Women and Equalities Select
Committee. Consultation was undertaken from 25 Jan to 5 April on extending
redundancy protection for pregnant women and new parents to cover the
period of pregnancy and a period after, an extension of six months. It also
set out more widely what the department is doing to tackle pregnancy and
maternity discrimination.

Performance report
31
Sustainable development goals
Progress in 2018-19
Goal 7
Ensure access to affordable, reliable,
sustainable and modern energy for all
BEIS delivery area

4.1 Maximise the advantages from the global shift to clean growth for
UK industry, through the new Clean Growth Grand Challenge
The Heat Networks Investment Project (HNIP) was also launched in October
and aims to increase the number of heat networks being built, deliver carbon
savings and help create the conditions necessary for a sustainable heat
network market to develop. HNIP will provide £320 million of capital funding to
gap fund heat network projects in England and Wales.
In December we published ‘Clean growth: transforming heating - overview of
current evidence’, which provided an overview of key issues identified by the
government review of options for achieving long term heat decarbonisation.
The Offshore Wind Sector Deal was published in March 2019 https://www.
gov.uk/government/publications/offshore-wind-sector-deal setting out the
UK’s ambition for the sector to 2030. This coincided with the UK and Taiwan
signing an MoU to further develop existing collaboration on Taiwan’s offshore
wind industry.
4.3 Deliver affordable energy for households and businesses
From 1 January 2019, around 11 million households who had stayed loyal to
energy suppliers pay a fairer price as the government’s price cap came in to
force. The cap will bring down the amount consumers have been overpaying to
energy companies by £1 billion a year. The cap will remain in place until at least
2020, while energy suppliers and industry continue to work with the energy
regulator Ofgem and BEIS to build an energy market that works better for all
consumers.
We continue to ensure that people are given control over their energy bills
through the provision of smart meters. There are now over 12.8 million smart
and advanced meters operating across homes and businesses in Great Britain.
In June 2018, the Secretary of State made an announcement in the House
relating to the decision not to proceed with Swansea Bay Tidal Lagoon.
Extensive analysis concluded that the costs that would be incurred by
consumers and taxpayers would be much higher than alternative sources of low
carbon power and that the contract would not provide value for money.
In November 2018, we published the guidance for CfD Allocation Round 3,
which will open on 29 May 2019 to eligible Pot 2 (less established)
renewable technologies.

Annual report and accounts 2018-19
32
Sustainable development goals
Progress in 2018-19
Goal 8
Promote sustained, inclusive and
sustainable economic growth, full and
productive employment and decent
work for all
BEIS delivery area

2.1 Promote the interests of UK businesses in EU and Euratom Exit
negotiations
In our EU Exit negotiations, we have sought to build the strengths we set out in
our Industrial Strategy and to capitalise on the opportunities before us. We have
focused on ensuring that the UK is the go-to place for scientists, innovators and
tech investors across the world, working to secure the right outcome for the UK
research base as we exit the EU and a close association with Euratom.
2.2 Encourage inward investment
BEIS has continued to attract investment into the UK by identifying innovative
solutions to emerging trends and challenges both in the UK and globally,
delivering on our vision for the future economy.
We have ensured the UK embraces global trends that will shape our rapidly
changing future and harness all the opportunities they bring. Each Grand
Challenge – AI and data, clean growth, future of mobility and ageing society -
represents an open invitation to business, academia and civil society to work
together to ensure the UK seizes these opportunities.
3.2 Promote fairness in the labour market, improved working
conditions and greater earning power for all
We are implementing the recommendations from the Matthew Taylor review. BEIS
laid secondary legislation to enact key elements of the Taylor Review package.
We are now preparing a draft employment bill to take forward the outstanding
elements. The Taylor Review Statutory Instruments were debated on 6 March.
Goal 9
Build resilient infrastructure,
promote inclusive and sustainable
industrialisation and foster innovation
BEIS delivery area

1.1 Our Industrial Strategy: building a Britain fit for the future
The Industrial Strategy sets out a long-term plan to boost the productivity
and earning power of people in the UK by focusing on five foundations of
productivity: ideas, people, infrastructure, business environment and places.
In support of these foundations, this year we published the ‘Local Industrial
Strategies policy prospectus’, which sets out the objectives, policy rationale and
approach to developing local strategies.
Business Secretary Greg Clark appointed Andy Haldane as Chair of the
Industrial Strategy Council - an independent body established to assess the
government’s delivery of the Industrial Strategy.
The Made Smarter Review made recommendations for industrial digitalisation
which were included in the Industrial Strategy. Work is now progressing through
delivery strategy.

Performance report
33
Sustainable development goals
Progress in 2018-19
1.2 Investing in science, research and innovation
A public consultation on the new Knowledge Exchange Framework was
launched in January. The framework will benchmark how well universities are
doing at fostering knowledge sharing and research commercialisation.
In January, UK Research and Innovation (UKRI) launched a programme,
commissioned by BEIS, to develop the first national research and innovation
infrastructure roadmap, based on an understanding of existing UK infrastructure
(and key international facilities in which the UK participates), future needs
(research, economic and social), and resulting investment priorities.
We launched the £900 million UKRI Future Leaders Fellowship Scheme – open
to the best researchers around the world.
Industrial Strategy Challenge Fund (ISCF) Wave 2 projects are now in delivery and the
process to commission expressions of interest for wave 3 went live in February 2019.
1.3 Support world leading sectors
The Secretary of State launched the Nuclear Sector Deal in June 2018. The
deal, worth over £200 million, will spearhead Britain’s move towards cleaner
economic growth while promoting new opportunities in innovation to develop
the technology and skills needed to maintain the UK’s position as one of the
world’s leading nuclear nations.
Construction at Hinkley Point C is bringing economic benefit to the South West
as construction continues. Spending with South West businesses has now
topped £1 billion, with a further £500 million to be spent in new contracts which
have already been signed. 1,700 of the current workforce live in Somerset, of
which 300 are under 35 years old.
In November 2018, we announced a sector deal with the AI sector. This £1 billion deal
will help to put the UK at the forefront of the AI industry. Thanks to this deal, around
1,000 government-funded AI PhDs will be created and private firms will invest £300
million in the sector. Funding will be allocated for training for 8,000 specialist computer
science teachers, along with £300 million for specialist AI research.
In December 2018 we published the Second Life Sciences Sector Deal, which
contains significant action to transform the prevention, diagnosis and treatment
of chronic diseases by 2030. We also published the Aerospace Sector Deal
in December, which positions the UK to take advantage of the global move
towards hybrid-electric and electric propulsion and to exploit valuable emerging
markets such as drones and urban air mobility. As reported under Goal 7, the
Offshore Wind Sector Deal was published in March 2019.
1.4 Supporting businesses to start and grow
In October, we secured £31 million of new funding to deliver an £11 million SME
leadership programme (2,000 individuals in year one, with aspiration for 10,000
per year by 2025) and £20 million to strengthen local networks.
The Business Basics Fund 2 was launched in January and makes available up
to £2 million for trials to build evidence on how to encourage SMEs to adopt
productivity boosting technology or management practice.
British Business Bank have also created a network of local managers to provide
regional advice, ensuring that businesses can tie in to existing regional expertise
or developing plans for specific industries.
Also, in January an Artificial Intelligence Memorandum of Understanding with
Japan was announced.

Annual report and accounts 2018-19
34
Sustainable development goals
Progress in 2018-19
Goal 11
Make cities and human settlements
inclusive, safe, resilient
BEIS delivery area

1.5 Drive growth across the country
Local industrial strategies, led by Mayoral Combined Authorities or Local
Enterprise Partnerships (LEPs) promote the co-ordination of local economic
policy and national funding streams and establish new ways of working
between national and local government, and the public and private sectors.
In January, the Prime Minister chaired the second biannual Council of LEP
Chairs. We published ‘Strengthened Local Enterprise Partnerships’ which sets
out how government and LEPs will work together to strengthen leadership
and capability, improve accountability and manage risk, and provide clarity on
geography. In October we published the policy prospectus for Local Industrial
Strategies, which sets out their objectives, the policy rationale and approach to
their development.
The second wave of six local industrial strategies were announced in July 2018:
Cheshire & Warrington, Heart of the South West, Leicester & Leicestershire,
North East, Tees Valley and West of England. In December, we announced that
the entire country will benefit from local industrial strategies with the rest of the
LEPs forming the final third wave.
Plans to bring together the relevant work of HM Land Registry, Ordnance
Survey, the Valuation Office Agency, the Hydrographic Office and Geological
Survey through the co-ordination of the Geospatial Commission continues with
the appointment in December 2018 of the Chair, Sir Andrew Dilnot, and the
Deputy Chair, Nigel Clifford.

Performance report
35
Sustainable development goals
Progress in 2018-19
Goal 12
Ensure sustainable consumption and
production patterns
BEIS delivery area

4.2 Ensuring that our energy system is reliable and secure
We are working with MHCLG on a Written Ministerial Statement in response
to several consultations regarding Shale, including the BEIS- run Nationally
Significant Infrastructure Project (NSIP) consultation.
The Shale Environmental Regulator Group (SERG) was launched on 5 October
2018. It brought the onshore oil and gas regulators (Environment Agency,
Health and Safety Executive and the Oil and Gas Authority) together as a virtual
regulatory group for the environmental aspects of shale gas exploration
and production.
The 2018 Autumn Budget announced a £315 million Industrial Energy
Transformation Fund to help businesses with high energy use to cut their bills
and emissions and reduce carbon use through increased energy efficiency and
the use of lower carbon energy and processes. In March 2019 BEIS launched
an informal consultation to help design the fund. Its focus is particularly on the
benefits and barriers to industrial decarbonisation.
Following legal challenges to and a suspension of the Capacity Market, BEIS
has worked with stakeholders, including the European Commission, to reinstate
the scheme. Our Statutory Instrument to enable the T-1 auction was made on 9
April and the auction is scheduled for summer 2019.
Goal 13
Take urgent action to combat climate
change and its impacts
BEIS delivery area

4.1 Maximise the advantages for UK industry from the global shift to
clean growth through the new Clean Growth Grand Challenge, and
take action on climate change
We have continued to support the UK Climate Change Act through the Clean
Growth Strategy and continued reduction in UK emissions. The first Green
Great Britain Week 15–19 October 2018 highlighted the opportunities clean
growth offers the UK and raised understanding of how business and the public
can contribute to tackling climate change.
Following the report last October by the Inter-Governmental Panel on Climate
Change (IPCC) on the impacts of 1.5C of warming, the UK commissioned its
independent advisers, the Committee on Climate Change (CCC), to provide
advice on its long-term targets. The CCC has subsequently recommended
that the UK legislates for a net zero target and the government is committed
to responding to this advice in a timeframe which reflects the urgency of this
critical issue.

Annual report and accounts 2018-19
36
Financial review
Expenditure: How expenditure is presented
The Department’s expenditure is reported on two
different bases in its Annual Report and Accounts:
Statement of Comprehensive Net Expenditure and
Statement of Parliamentary Supply.
Statement of Comprehensive Net Expenditure
The Statement of Comprehensive Net Expenditure
(SoCNE) (page 113) includes all operating income
and expenditure relating to the Departmental
Group. In 2018-19, the Departmental Group’s net
operating expenditure amounted to (£94.4) billion
and £13.6 billion for the core Department and
agencies. This expenditure is calculated following
accounting standards and guidance which are
explained in more detail in note 1.1 (page 123) and
on a similar basis to those rules generally applied
by private sector businesses.
Statement of Parliamentary Supply
Each year, Parliament approves the total funds
available to the department to spend against
specific limits. The Statement of Parliamentary
Supply (SoPS) (page 89) presents a total
expenditure for our Department Group of (£94.2)
billion and compares this with the Budget presented
to Parliament of (£76.7) billion. These figures are
calculated in accordance with HM Treasury’s
Consolidated Budgeting Guidance, which differs in
several respects with the accounting basis above.
It is against these limits that the department, is
held accountable for its performance and the
use of taxpayers’ fund. The summaries and
explanations of key movements below have
been prepared on this basis, except where
stated otherwise.
Overview of expenditure in 2018-19
2018-19
Outturn
£m
2018-19
Budget
£m
2017-18
Outturn
£m
TME1
(94,221)
(76,692)
86,033
Resource DEL
1,246
1,434
1,714
Capital DEL
10,814
11,496
10,392
Total DEL2
12,060
12,930
12,106
Resource AME
(105,865)
(89,667)
75,124
Capital AME
(416)
45
(1,197)
Total AME
(106,281)
(89,622)
73,927
1.
The TME outturn is the total of Voted and Non-Voted in the Statement of Parliamentary Supply.
2.
This expenditure is analysed in ‘Where we spent our money’ on pages 15 and 16.
Our Budget Framework
TME
AME
DEL
Resource
DEL
Programme
RDEL
Admin
RDEL
Capital
DEL
General
capital
Financial
transactions
HM Treasury sets the overall budgetary
framework for government spending.
The total amount the department spends
is referred to as its TME, Total Managed
Expenditure. Budgets are classified as either
AME: Annually Managed Expenditure; or
DEL: Departmental Expenditure Limit.
AME budgets are volatile or demand-led in a way
that the department cannot control. HM Treasury
do not set firm AME budgets in spending
reviews, but the department monitors AME
forecasts closely and these are updated annually.
DEL budgets are understood and
controllable. HM Treasury set firm limits for
each type of DEL budget. This is done at
spending reviews which occur every 3 to 5
years. DEL budgets are divided into RDEL:
resource spend and CDEL: capital spend.
The RDEL budget is further split into:
• ‘programme’ budgets for direct frontline
service provision
• ‘administration’ budgets for the running
costs of the department such as back-
office staff, rent and IT
The CDEL budget is further split into:
• ‘financial transactions’ for loans given
or shares purchased
• ‘general capital’ for spending on all other
assets or investments

Performance report
37
This does not represent cash spend. The Departmental Group’s performance in any year is
significantly impacted by accounting ‘fair value’ movements, most significantly those included in the
‘Resource AME’ lines. These accounting adjustments are referred to as ‘non-cash’ and as such
tend not to feature in conventional descriptions of departmental ‘spending’ of the kind shown in the
Performance report. The largest movements are driven by changes in discount rates which have
a highly material impact on the value of nuclear decommissioning and other provisions. The main
categories of spend and variations in expenditure against budget and the prior year are explained in
further detail below.
Comparison of expenditure to prior years
Our key areas of net expenditure for the last three years are shown in the table below.
2018-19
£m
2017-18
restated
£m
2016-17
restated
£m
NDA
(99,592)
73,218
5,082
Science and research
7,511
6,740
6,374
Contracts for Difference
(2,971)
3,558
(273)
UK Research & Innovation (Innovate UK)
1,052
973
801
Coal Authority
(1,993)
1,545
34
Green Investment Bank and
Green Infrastructure Platform
11
24
845
Renewable Heat Incentive
818
687
545
International Climate Finance
321
330
333
Post Office
228
140
220
Green Investment Bank sale receipts
-
(1,621)
-
Other
394
439
2,304
Total
(94,221)
86,033
16,265
While spending on areas such as UK Research & Innovation (Innovate UK), and International Climate
Finance remains broadly consistent, there are three categories where expenditure shows a high
variation in the current year. All of these are driven by accounting fair value movements to assets and
liabilities, rather than in-year cash or other expenditure.
These amounts can be volatile in years when inputs underlying accounting estimates, such as discount
rates, are changed. These are explained in detail in the review of the Statement of Financial Position on
the following pages as follows:
Nuclear Decommissioning Authority (NDA)
In addition to expenditure incurred in the period, changes to the discount rate assumption have decreased
the provision values and resulted in a significant negative expense. A full explanation of the reasons
behind this is set out in (a) Impact on changes in discount rate page 40 and (b) Nuclear Decommissioning
Authority provisions on page 42.
In the current year the change in discount rate alone accounted for a negative expense of (£96.0)
billion (see also Financial Statements notes 4.3 and 19.1).
Coal Authority
The Authority has long-term future liabilities arising from its responsibilities arising from the ownership
of abandoned coal mines. These are again highly sensitive to movements in discount rates, with an
impact of (£2.6) billion in the year (see also Financial Statements notes 4.3 and 19.2).

Annual report and accounts 2018-19
38
Contracts for Difference (CfD)
Fair value movements of (£2.0) billion recognised
in the SoCNE have been driven by changes
to inflation and forecast price inputs into the
valuation model, and the deferred difference
recognised during the year. This is further
explained in (c) Contracts for Difference on page
43 and Financial Statements note 9.
Comparison of Outturn against Budget
Outturn
£m
Budget
£m
Variances

£m
%
TME
(94,221)
(76,692)
17,529
22.9%
Resource DEL
1,246
1,434
188
13.1%
Capital DEL
10,814
11,496
682
5.9%
Total DEL
12,060
12,930
870
6.7%
Resource AME (105,865)
(89,667)
16,198
18.1%
Capital AME
(416)
45
461
1,024%
Total AME
(106,281)
(89,622)
16,659
18.6%
The variances are the TME (Voted and Non-
Voted) against Budget (Voted and Non-Voted),
this is different to the presentation in the SoPS
which compares Voted Expenditure against
Voted Budget. Explanations for the key variances
from budget are as follows, split by budget line
headings from the SoPS.
Total Managed Expenditure (TME)
Our TME budget was (£76.7) billion; against this
the department had an outturn of (£94.2) billion.
The difference of £17.5 billion resulted from lower
than budgeted AME, primarily due to accounting
valuation adjustments as explained below.
Resource DEL
The Estimate was £1.4 billion. Outturn against the
Estimate was £1.2 billion; £188 million lower than
budget due to a mixture of economies across
various areas and organisations. The significant
components include £71 million relating to
economies on Science and Research budgets,
including £50 million not required for potential
impairments; £56 million on Government as a
Shareholder part of which relates to additional
income from the Official Receiver and £21 million
net relating to NDA economies.
Capital DEL
The Estimate was £11.5 billion. Outturn against
the Estimate was £10.8 billion, £682 million
lower than budget. A significant proportion,
£499 million of the underspends is attributed to
limited capital calls by financial institutions under
the Enterprise Financial Guarantees schemes
operated by the British Business Bank on
behalf of the Department. The extent of annual
capital calls is not wholly predictable, as it is
intrinsically linked to the financing needs of the
underlying business.
Resource AME
The Estimate was (£89.7) billion, and outturn
was (£105.9) billion, £16.2 billion lower than
budget, principally due to accounting valuation
adjustments, including:
• The NDA’s nuclear decommissioning provision,
where the changes in the long-term discount
rates resulted in an Outturn of (£101.8) billion
compared to an Estimate of (£99.0 billion). The
variance of £2.8 billion, reflects the uncertainties
when budgeting for the provision and
represents less than 2.8% of the total change.
• The Coal Authority provision, where the change
in the long-term discount rates resulted in an
Outturn (£2.0) billion compared to the Estimate
of £2.0 billion, a variance of £4.0 billion.
• CfD liabilities, which decreased by (£3.0)
billion, from (£15.9 billion) to (£12.9 billion). This
was £9.0 billion lower than the Estimate due
to higher than budgeted wholesale electricity
prices projections used in the updated price
series to determine the year-end year fair
value. This translates into lower CfD liabilities
for the department.
Capital AME
The £461 million underspend on capital AME is
almost entirely due to lower than expected demand
by Post Office Limited for its working capital
funding from the core Department at the year-end.

Performance report
39
Expenditure on official development
assistance
Official Development Assistance (ODA)
is government aid that targets economic
development in developing countries.
To maximise effectiveness, we aim to use
monitoring, evaluation and learning to identify
opportunities for improvement.
ODA spend is reported on a calendar year and
cash basis. BEIS’ total ODA spend in 2018 was
£851 million; £533 million relating to research and
innovation and the rest, £318 million on climate
and energy. A further breakdown of spend by
sectors is presented in the table below.
ODA spend on research and innovation
The £533 million ODA spend, generated and
applied knowledge and technology to address
development challenges. This included work to:
• introduce parasite resistant crops;
• support sustainable land management
practices in East Africa;
• improve access to maternal health care;
• inform policymaking on drugs policy in
Columbia;
• combat antimicrobial resistance; and
• improve access to affordable, clean energy.
ODA spend on climate and energy
Of the £318 million ODA spend, £308 million was
invested in international climate finance. This
included:
• £35.5 million in the ‘Green Climate Fund’, the
largest joint climate fund that supports the
Paris Agreement;
• £68 million to boost the uptake of greener
construction practices;
• £36 million for energy efficiency and renewable
energy projects in India, South Africa and
East Africa;
• £19 million to support coal phase out for
developing countries with high current or
future coal use.
Provisional expenditure by DAC 5 sector code
Sector
code
Sector
2018
£m
111
Education, Level Unspecified
53.8
113
Secondary Education
1.5
114
Post-Secondary Education
7.1
121
Health, General
102.3
122
Basic Health
0.2
123
Non-communicable diseases
0.1
140
Water and supply sanitation
0.1
151
Government & Civil
Society-general
8.5
160
Other Social Infrastructure
& Services
0.6
210
Transport & Storage
3.3
230
Energy
3.8
231
Energy Policy
52.5
232
Energy generation,
renewable sources
36.7
233
Energy generation, non-
renewable sources
0.3
250
Business & Other Services
0.1
311
Agriculture
73.4
312
Forestry
0.0
313
Fishing
0.8
321
Industry
19.3
410
General Environment Protection
90.9
430
Other Multisector
269.2
510
General budget support
8.8
910
Administrative Costs of Donors
5.8
998
Unallocated/unspecified
112.0
Total
851.1
Notes
1.
The BEIS ODA spend for 2018 provided are
provisional. The final official statistics will be
published by the Department for International
Development in November 2019.
2.
The provisional official statistics for 2018 published
by DFID may be found in the publication ‘Provisional
UK Official Development Assistance as a Proportion
of Gross National Income’ https://www.gov.uk/
government/statistics/statistics-on-international-
development-provisional-uk-aid-spend-2018
3.
Sector codes used by the OECD Development
Assistance Committee (DAC): http://www.oecd.org/
dac/stats/purposecodessectorclassification.htm

Annual report and accounts 2018-19
40
Consolidated statement of financial positon
The Department remains in a net liability position,
however, there has been a significant decrease
in the Department’s net liability position from the
prior year. This is driven by changes to discount
rates and the impact of those changes on
nuclear decommissioning provisions. The most
significant assumptions and balance underlying
the Statement of Financial Position are:
a. Impact of change in discount rates
b. Nuclear Decommissioning Authority
provision; and
c. Contracts for Difference.
A fuller explanation of the nature of these matters
is set out below
(a) Impact of changes in discount rates
Category
2018-19
2017-18
Rationale
Nuclear decommissioning provisions
Short term < 2 years
-1.22%1
-2.42%
Set by HM Treasury Public
Expenditure System (PES) Secretariat
7 December 2018
Short term 2 – 5 years
-1.31%1
-2.42%
Medium-term 6 -10 years
-0.94%1
-1.85%
Long-term > 10 years
-0.11%1
-1.56%
CfD financial instruments
Real rate (as contracts are in real terms)
+0.70%
+0.70%
As above
Coal pensions
Real rate + 3% RPI (as contractual
figures are in nominal values)
+3.70%
+3.70%
As above: financial instruments discount rate
(non-indexed)
Repayable Launch Investments
Higher of the implicit rate of return or
the financial instrument’s rate
+3.50%
+ RPI 2.60%
+3.50%
+ RPI 2.45%
Risk-free rate for government investment
appraisal set by HM Treasury Green Book,
adjusted for inflation
Notes
1.
HM Treasury provided Nominal and Inflation rates for discounting provisions for 2018-19, rather than Real rates as
they have in prior years. The values above are real rates for 2018-19 and 2017-18 taking into account the nominal
and inflation rates for 2018-19. Further details of the nominal and inflation rates are given in the Departmental Group
Accounting Policies note 1.23
Some of our priorities carry obligations that are
very long-term and will involve expenditure over
decades to come. The eventual costs of these
long-term projects are uncertain but we are
required to present a single number in the annual
accounts. This single number is based on our
best estimate of costs, technology and other
relevant factors, adjusted to reflect the changing
value of money over time.
The worth of the Department’s future cash flows
are calculated at present value in accordance
with accounting standards. This present value
reflects the time value of money. The accounts
use a number of different discount rates
depending on the nature of the transaction and
the regulation applicable.
In the past, the time value of money has usually been
positive which means money could be invested in the
present for a return in the future that would exceed
the rate of inflation – this is known as a positive ‘real’
return. Government bonds are seen as a low risk form
of investments. Usually, therefore, government bonds
bring a lower rate of return than other investments. As
bonds pay a fixed cash amount when they mature,
the higher the price paid for the bonds now, the
lower the rate of return is considered to be. Following
the global financial crisis, demand for lower–risk
investments increased, particularly government
bonds. As a result, the price of government bonds
rose. This has resulted in government bonds providing
a negative ‘real’ return. The long-term discount rate
has been negative since 2015. In 2018-19, the long-
term discount rate remains negative but not to as
significant extent as in prior years.

Performance report
41
When negative discount rates are applied to the
Department’s long-term obligations, this has
the effect of significantly increasing the reported
value of the liabilities, however, with the decrease
of the negative discount rate this has resulted
in a decrease in the report value of the liabilities
this year. Even when the cash the Department
expects to pay has not changed substantially,
year on year. But not all rates are negative. For
investment appraisal government continues
to use positive rates, to ensure that projects
are correctly appraised and generate future
benefits. Our accounts use positive discount
rates to determine the present value of future
income generated from assets and investments.
When positive rates have been used to discount
future cash receipts, then the present value of
them is lower than the cash the department will
receive. The following tables set out the specific
material balances in our accounts that have been
discounted. The impact of the discounting can
be assessed by comparing the discounted value
with the undiscounted value.
Impact on assets
Assets have been discounted at positive rates.
For financial instruments we are required to use
the prescribed HM Treasury discount rate of
0.7% real and 3.7% nominal, or the rate of return
implicit in the contract if higher. For the repayable
launch investments, we assessed the implicit rate
to be 3.5% plus RPI; 2018-19: RPI was 2.60%
(2017-18: RPI was 2.45%) giving an implicit rate of
6.10% (2017-18: 5.95%).
Category
2018-19
Discounted
assets
2018-19
Undiscounted
assets
2018-19
Impact of
discounting
2017-18
Discounted
assets
2017-18
Undiscounted
assets
2017-18
Impact of
discounting
£m
£m
£m
£m
£m
£m
Repayable launch
investments
1,058
1,348
(290)
1,047
1,540
(493)
Coal pensions
920
1,058
(138)
1,033
1,207
(174)
Impact on provisions
Both the Nuclear Decommissioning Authority and the Coal Authority have long-term provisions
relating to the expected future cost of managing the energy legacy. The negative discount rates have
increased the present value of future cash flows significantly.
Category
2018-19
Discounted
liability
2018-19
Undiscounted
liability
2018-19
Impact of
discounting
2017-18
Discounted
liability
2017-18
Undiscounted
liability
2017-18
Impact of
discounting
£m
£m
£m
£m
£m
£m
NDA
nuclear provision
129,709
123,311
6,398
233,282
120,165
113,117
Coal Authority
provision
2,299
2,174
125
4,328
1,902
2,426
Impact on financial instruments
The fair value of the Contracts for Difference (CfD) obligation disclosed in the accounts is adjusted
using the 0.7% real term discount rate. Each year, the fair value of the CfD is reassessed to reflect
changes in the expected cash payments that will be made over the life of the contracts, and then the
updated expected cash payments are discounted.
Category
2018-19
Discounted
liability
2018-19
Undiscounted
liability
2018-19
Impact of
discounting
2017-18
Discounted
liability
2017-18
Undiscounted
liability
2017-18
Impact of
discounting
£m
£m
£m
£m
£m
£m
CfD liability
35,249
37,176
(1,927)
39,201
41,603
(2,402)

Annual report and accounts 2018-19
42
(b) Nuclear Decommissioning Authority
provisions
NDA is responsible for 17 nuclear licensed sites
across the country, with a range of facilities
including former nuclear power stations,
research facilities and nuclear fuel fabrication and
reprocessing facilities. Some of these sites date
from the earliest days of nuclear power. Unlike
modern nuclear facilities, decommissioning of
these sites was not built into plans or designs.
Decommissioning of sites will take many decades.
In part, this is because plans often include
periods of ‘care and maintenance’, where sites
are made safe and put into an interim state,
allowing residual amounts of radioactive material
to decay over time. By doing this, the final stages
of decommissioning will be easier and safer
to complete.
NDA’s best estimate of the future costs of
the estate over the next 100+ years on an
undiscounted basis is £123.3 billion.
This figure is based on dealing with an assumed
inventory of materials with varied radiological
characteristics, and using the extant strategy for
retrieval and disposal of the resulting materials
over several decades. Each of these elements is
uncertain in its own right – the cost of developing
the necessary technology and plants to deal with
these activities is also uncertain. The quality of
the forecast becomes less certain the longer the
projection.
NDA has reviewed the methodologies used in
the calculation, taking into account HM Treasury
Green Book guidance and the need to remove
optimism bias. Projects like these could typically
have a range of estimates from -50% to +300%.
In light of uncertainties in the estimate, NDA
considers it prudent to present a credible range
of outcomes. The range presented for the current
year is for undiscounted costs of £99 billion to
£232 billion.

NDA provision: forecast undiscounted expenditure
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2018
2028
2038
2048
2058
2068
2078
2088
2098
2108
2118
2128
2138
£ million
Sellafield
Rest of programme

Performance report
43
c) Contracts for Difference
CfD are designed to incentivise investment
in a mix of low carbon electricity generation
technologies which will help the UK meet its
renewable and decarbonisation targets. CfDs do
this by agreeing with a generator a strike price for
electricity supplied, thereby providing certainty
needed for private investment, while protecting
consumers from having to continue to pay higher
support costs when electricity prices are high.
The support payments paid (or repaid) in future
will be calculated from the difference between
the strike price and the market reference price
prevailing at the time.
Low Carbon Contracts Company (LCCC)
Difference payments under the CfDs are funded
through a levy paid by licensed energy suppliers.
The LCCC is the company established by
Government to collect this levy, manage the CfDs
and pay or receive the contracted difference
payments. The LCCC is managing all 54
recognised CfD contracts.
Accounting for fair value (FV)
In order to comply with the relevant accounting
standards, the Department is required to
estimate the ‘fair value’ of future CfD payments.
Difference payments under CfDs can be positive
(an asset) or negative (a liability) and are currently
recognised as a liability. The matching asset
arising from the statutory obligation on suppliers
is not recognised under accounting standards.
The CfD liability figure is calculated using a model
that forecasts the rate of generation, expected
demand for electricity and electricity prices
over the term of the contract. The figures in the
financial statements represent management’s
best current estimate within a range of scenarios
and will be subject to change over time.
In accordance with accounting standards the
initial fair value of any contract is deferred i.e. not
recognised in the accounts. The total deferred
fair value of CfDs disclosed in the accounts was
£22.3 billion on 31 March 2019.
The Department recognises all subsequent
movements of fair value on CfD contract
recognised in the accounts, whose cumulative
value was £35.2 billion by 31 March 2019,
through the Statement of Comprehensive Net
Expenditure; and recognises a liability, which
was £12.9 billion as at 31 March 2019, on the
Statement of Financial Position. The movements
in year are presented in the tables below. Further
details on the CfDs can be found in note 9 on
pages 152 to 160.
Movements in fair value of CfDs recognised in
the Accounts1
2018-19
£ bn
2017-18
£ bn
1 April
39.2
31.4
Changes in FV on exiting
recognised contracts
(2.7)
3.7
Additions
-
4.6
Release of CfD liability relating
to terminated contracts
(0.3)
-
Payments made to generators
(1.0)
(0.5)
31 March
35.2
39.2
Notes
1.
The tables exclude the fair value of Hinkley Point
C, which is not recognised in the accounts as
explained below.
Effect on the Statement of Financial Position of
CfD’s recognised in the Accounts1
2018-19
£ bn
2017-18
£ bn
1 April
15.9
12.3
Changes in FV on exiting
recognised contracts
(2.7)
3.7
Release of CfD liability relating
to terminated contracts
(0.0)
-
Payments made to generators
(1.0)
(0.5)
Deferred differences
recognised
0.7
0.4
31 March
12.9
15.9
Notes
1.
The tables exclude the fair value of Hinkley Point
C, which is not recognised in the accounts as
explained below.

Annual report and accounts 2018-19
44
Effect on the Statement of Comprehensive Net
Expenditure of CfDs recognised in the Accounts1
31 March
2019
£ bn
31 March
2018
£ bn
Contracts for difference
derivatives
(2.0)
4.1
Comprising:
Changes in FV on existing
recognised contracts
(2.7)
3.7
Release of CfD liability relating
to terminated contracts
(0.0)
-
Deferred differences
recognised
0.7
0.4
Contract for difference
derivatives total
(2.0)
4.1
Hinkley Point C
The CfD contract for Hinkley Point C (HPC) was
signed in September 2016, but it has not been
recognised in the accounts for reasons explained
in note 9 to the accounts. The Department’s
best estimate of fair value at 31 March 2019 was
£30.3 billion.
Our charging policy:
Our core Department provides only a limited
number of services for which it charges fees.
Any such fees are set to comply with the cost
allocation and charging requirements set out
in HM Treasury and Office of Public Sector
Information guidance.
The Insolvency Service sets its fees to recover
costs. It has a range of fees covering three areas:
• case administration, where fees reflect the
average costs of administering bankruptcy
cases and compulsory company liquidation
cases and also the average cost of completing
debt relief orders;
• insolvency practitioner regulations, where fees
include the cost of authorising and monitoring
insolvency practitioners and registering
individual voluntary arrangements;
• estate accounting, where fees reflect the cost
of financial transactions on insolvency cases
using the Insolvency Service account.
Details of charging polices relating to partner
organisations may be found in their respective
published accounts.

Performance report
45
Sustainability report
We are committed to sustainability in the way we make policy and procure goods and services.
We are also committed to environmental sustainability, and as part of the Greening Government
Commitments, we report on our greenhouse gas emissions, water use, paper use and waste.
Environmental sustainability
Greenhouse gas emissions
Our BEIS Green Guardians network supports
BEIS in monitoring our energy consumption
and in plans to introduce further energy
saving measures.
Waste
We installed bins for recycling a variety of
materials and plan to eradicate the majority of
single-use consumer plastics.
Water and paper
We recently received accreditation to ISO
50001 (energy management) and ISO1400
(environmental management). We will be
reviewed annually against these standards
and we will seek continuous improvement in
both. We have a closed paper cycle whereby
all paper is recycled for reuse.
Food and catering
We are committed to sustainable, and where
possible, British food products. We are
working to eliminate, the majority of single-use
consumer plastics from our catering provision.
Sustainable construction
We have had no new builds in the last year.
We work with the Government Property
Agency who hold our leases to ensure any
construction work prioritises sustainability and
reaches the government’s buying standard.
Biodiversity and the natural environment
We have no significant impact on biodiversity.
However, site license companies managing
NDA nuclear sites are contractually required to
have suitable biodiversity action plans in place.
Sustainable procurement
Suppliers
We used the Crown Commercial Service
framework to procure our goods and services.
The procurement service works with its partners
to ensure sustainability goals are achieved.
Engagement with small and medium enterprises
We are committed to meeting the government
target of 33% direct procurement and through
the supply chain by the end of 2022.
In 2018-19, the share of procurement made
directly with SMEs was 31.8%3, of which
the core Department’s share was 24.1%. In
2017-18, the share of the procurement made
directly with SMEs was 28.4%, of which the
core Department share was 20.8%.
Prompt payments
We have a policy to pay 80% of undisputed
invoices within five days with the remainder
paid in 30 days. In 2018-19, the core
Department paid 94.8% of undisputed invoices
within five days and 99.3% within 30 days.
The most common reasons for invoices to be
put on hold are due amounts on the purchase
order not matching receipts, or a supplier
has had a change of address which does not
the match invoice. These issues need to be
checked before payments are made.
3
Entities include the core Department and all commercially active Arm’s Length Bodies of BEIS: 1) core Department, 2)
ACAS, 3) Civil Nuclear Constabulary, 4) Coal Authority, 5) Committee on Climate Change, 6) Companies House, 7) In­
tellectual Property Office, 8) Insolvency Service, 9) Land Registry, 10) Low Carbon Contracts Company, 11) Met Office,
12) National Nuclear Laboratory, 13) National Physical Laboratory, 14) Oil & Gas Authority, 15) Ordnance Survey, 16) UK
Atomic Energy Authority, 17) UK Research and Innovation, 18) UK Space Agency, 19) UK Shared Business Services.

Annual report and accounts 2018-19
46
Sustainability in policy development
Rural proofing
Our Industrial Strategy policy outlines
government plans to increase productivity and
economic growth – this is across every part
of the country. It covers rural issues, including
shortage of work premises, slow internet
connections and a lack of knowledge transfer
between business communities spread across
wide areas. Rural proofing is built into our
impact assessments.
Climate change adaptation
Climate change adaptation refers to adapting
to the consequences of climate change. We
contribute to the cross-government National
Adaptation Plan, published every five years. It
sets out how risks of extreme weather events
will be managed (e.g. flood resilience measures)
for communities, the built environment,
businesses and local government.

Progress on Greening Government Commitments
Targets by 2019-20, compared to 2009-10 baseline
Progress in 2018-19
Total greenhouse gas emissions: reduce by 66%1
64.75%
Domestic flights: reduce by 30%
44.26%
Volume of water used: reduce generally
59.11%
Reams of paper procured: reduce by 50%
83.83%
Total non-hazardous waste generated: reduce generally
71.66%
Waste to landfill: reduce proportion to 10%
14.04% in 2018-19
Waste recycled/reused: increase generally
6.04%
Notes
1.
66% is the new 2020 target for BEIS. The original 2020 target of 40% has been exceeded; in 2016-17, we had
achieved 51% reduction. Further information is available at the Greening Government Commitments page on GOV.UK.

Performance report
47
Greening Government Commitments data1
Greenhouse gas emissions
2018-19
2017-18
2016-17
Baseline
2009-10
Emissions (tonnes of CO2e)
Emissions scope 12
6,644
8,007
6,109
17,837
Emissions scope 23 and 34
16,037
22,325
25,480
46,507
Emissions total
22,681
30,332
31,589
64,344
Related energy consumption (kWh)
Electricity: non-renewable
28,660,707
29,221,350
30,360,293
45,323,891
Electricity: renewable
15,595,594
17,428,973
19,540,688
38,675,792
Gas
20,347,275
36,185,503
29,071,359
62,905,227
District heating
113,953
149,220
124,776
-
Other heat
9,210,230
6,824,394
2,664,381
9,865,113
Total energy consumption
73,927,759
89,809,439
81,761,497
156,770,023
Related expenditure (£k)
Expenditure on energy
7,460
6,755
6,467
n/a
Expenditure on CRC licence
298
598
497
n/a
Expenditure on official business travel5
13,257
7,559
11,660
n/a
Total expenditure on energy and
business travel
21,015
14,912
18,624
n/a
Domestic business travel flights
Total number of flights
4,503
2,689
5,125
8,078
Waste generated (tonnes)
Total waste generated
2,137
2,468
2,159
7,541
non-hazardous waste: to landfill
300
289
197
2,986
non-hazardous waste: reused/recycled
1,293
1,779
1,775
4,107
non-hazardous waste: composted/
biodigestion
79
49
60
25
ICT waste reused
-
-
-
7
ICT waste recycled
30
11
51
2
incinerated energy from waste
536
389
181
448
reams of paper procured
71,335
61,825
97,893
441,134
Total disposal cost (£k)
404
468
432
n/a
Water consumption
Water consumption (m3)
115,907
110,457
126,468
283,495
Water supply and sewage costs (£k)
489
325
329
n/a
Notes
1.
Entities include: i. BEIS core Department, ii. Companies House, iii. Intellectual Property Office, iv. Land Registry, v.
Natural Environment Research Council, vi. Nuclear Decommissioning Authority, and vii. Ordnance Survey
2.
Scope 1: direct emissions from sources owned or controlled
3.
Scope 2: indirect emissions from consumption of purchased electricity or sources of energy generated upstream
4.
Scope 3: other indirect emissions occurring as a consequence of BEIS’ operations, but not directly owned or
controlled by BEIS
5.
Travel costs for the Land Registry have not been included

Annual report and accounts 2018-19
48
Other required performance reporting
Anti-bribery and anti-corruption
No cases of bribery or corruption were identified within BEIS this year.
We have made good progress, working with other departments and law enforcement agencies to
identify and implement best practice. We will continue to emphasise the importance of effective
anti-bribery and corruption practices both in the UK and in any overseas’ operations we fund. BEIS
policies and controls are being refreshed to include more up to date and relevant advice to identify
and prevent potential instances of bribery, corruption and non-compliance as well as clearly defining
appropriate reporting routes. These will be made available to all BEIS staff and our suppliers.
Public correspondence
13.8
11.1
6.8
3.6
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
No. of written enquiries received
% with response within 15 days
956
789
781
718
712
547
721
992
753
777
721
939
81%
81%
80%
86%
81%
73%
78%
67%
55%
59%
82%
91%
87%
We aim to respond to 80% of our correspondence within 15 working days.
In 2018-19, we received 9,406 written enquiries from MPs, Peers and members of the public.
We responded to 76% of cases within 15 working days. The table above shows our monthly performance.
Complaints to the Parliamentary Ombudsman

No. complaints accepted for
investigation
9
(a) Investigations fully upheld
1
(b) Investigations partly upheld
0
(c) Investigations not upheld
8
The data in the table to the left has been
obtained from the Parliamentary Ombudsman
Annual Report for 2017-18, the latest available.
The Ombudsman only accepts complaints that
have been through our complaints process.
We aim to answer all formal complaints via
xxx@xxx.xx within 20 working days.
Only a small percentage of complaints we receive
are escalated to the Ombudsman.

Performance report
49
Advertising campaigns
We ran three major advertising campaigns to support the ‘A Fair Workplace’ initiative.
National minimum wage and
living wage
The National Living and
Minimum Wage campaign
launched in April and ran for
six months. The campaign was
designed to raise awareness of
the wage increases from 1 April
2018, to encourage workers
to check their pay and secure
the increase from employers.
The £1.3 million campaign
included advertising on radio,
poster sites and social media,
and drove more than 600,000
visits to the campaign website.
It also urged those persistently
underpaid to complain to
HMRC to investigate employers.
Shared parental leave
BEIS, together with the Gender
Equalities Office launched
phase 2 of the Shared Parental
Leave campaign in February
2019. It was designed to spark
conversations between parents
about sharing parental leave and
encourage employers to promote
it in the workplace. The £0.25
million campaign was aimed at
expectant mums in England,
Scotland and Wales. It included
online advertising through
social media and targeted titles,
supported with in-house PR to
national and consumer media.
The campaign website (www.gov.
uk/sharetheleave) featured advice
and case studies of parents
who have already taken shared
parental leave. The campaign is
expected to drive around 80,000
visits to its website.
Holiday Pay
We launched a new campaign
in February 2019 to raise
awareness of worker entitlement
to Holiday Pay. The £1 million
campaign featured advertising
on bus stop poster sites and
shopping malls, as well as on
social media sites including
Facebook. The campaign was
designed to encourage workers
to check with their boss to
make sure they received holiday
pay. All advertising drove
more than 500,000 visits to
information pages on GOV.UK.
Alex Chisholm
Permanent Secretary and
Principal Accounting Officer
8 July 2019

The National Living Wage is an integral component of the
‘People’ foundation of the Industrial Strategy which highlights
the potential to drive up wages and productivity within
traditionally lower-paying sectors.
Accountability
report

Accountability report
51
Statement of Accounting Officer’s
responsibilities
Under the Government Resources and Accounts
Act 2000 (the GRAA), HM Treasury has directed
the Department for Business, Energy and
Industrial Strategy to prepare, for each
financial year, consolidated resource accounts
detailing resources acquired, held or disposed of,
and the use of resources during the year by the
department (inclusive of its executive agencies),
sponsored non-departmental public bodies and
other arm’s-length public bodies. These bodies
are designated by order made under the GRAA
by Statutory Instrument 2018 no 1335 (together
known as the ‘Departmental Group’, consisting
of the core Department and sponsored bodies
listed at note 28 to the accounts). The accounts
are prepared on an accruals basis and must give
a true and fair view of the state of affairs of the
department and Departmental Group, and the
net resource outturn, application of resources,
changes in taxpayers’ equity and cash flows of
the Departmental Group for the financial year.
In preparing the accounts, the Accounting
Officer of the department is required
to comply with the requirements of
Government Financial Reporting Manual
and in particular to:
• observe the Accounts Direction issued by the
Treasury, including the relevant accounting and
disclosure requirements, and apply suitable
accounting policies on a consistent basis;
• ensure that the department has in place
appropriate and reliable systems and procedures
to carry out the consolidation process;
• make judgements and estimates on a
reasonable basis, including those judgements
involved in consolidating the accounting
information provided by non-departmental and
other arm’s-length public bodies;
• state whether applicable accounting standards
as set out in the Government Financial Reporting
Manual have been followed, and disclose and
explain any material departures in the accounts;
• prepare the accounts on a going concern basis;
• confirm that the Annual Report and Accounts
as a whole is fair, balanced and understandable
and take personal responsibility for the Annual
Report and Accounts and the judgements
required for determining that it is fair, balanced
and understandable.
HM Treasury has appointed the Permanent
Head of the department as Accounting
Officer. The Accounting Officer has also appointed
the Chief Executives or equivalents of its sponsored
non-departmental and other arm’s length public
bodies as Accounting Officers of those bodies.
The Accounting Officer of the department
is responsible for ensuring appropriate systems
and controls are in place to ensure any grants
the department makes to its sponsored bodies
are applied for the purposes intended and that
such expenditure and the other income and
expenditure of the sponsored bodies are properly
accounted for, for the purposes of consolidation
within the resource accounts. Under their terms
of appointment, the Accounting Officers of
the sponsored bodies are accountable for the
use, including the regularity and propriety, of
the grants received and the other income and
expenditure of the sponsored bodies.
The responsibilities of an Accounting Officer,
including responsibility for the propriety and
regularity of the public finances for which the
Accounting Officer is answerable, for keeping
proper records and for safeguarding the assets
of the department or non-departmental or
other arm’s length public body for which the
Accounting Officer is responsible, are set
out in Managing Public Money published by
HM Treasury.
Accounting Officer’s confirmation
I have taken all the steps I ought to have taken
to make myself aware of any relevant audit
information and to establish that the department’s
auditors are aware of that information. So far as
I am aware, there is no relevant audit information
of which the auditors are unaware.
Alex Chisholm
Permanent Secretary and
Principal Accounting Officer
8 July 2019

Annual report and accounts 2018-19
52
Directors’ report: our leadership team
Our ministers
The Rt Hon
Greg Clark MP
Secretary of State
for Business, Energy
and Industrial Strategy
The Rt Hon
Claire Perry MP
Minister of State
for Energy and
Clean Growth
The Rt Hon
Lord Henley
Parliamentary Under
Secretary of State
Chris Skidmore
MP
Minister of State
for Universities,
Science, Research
and Innovation
Kelly Tolhurst MP
From 19 July 2018
Parliamentary Under
Secretary of State, Minister for
Small Business, Consumers
and Corporate Responsibility
Andrew Stephenson MP
From 4 Apr 2019
Parliamentary Under
Secretary of State, Minister
for Business and Industry
Jack Berry MP
From 7 Jun 2019
Parliamentary Under
Secretary, Minister for the
Northern Powerhouse
and Local Growth
Our management: executive directors
Alex Chisholm
Permanent
Secretary
Sam Beckett
Nick Chism
from 1 Jun 2018
Julian Critchlow
from 14 May 2018
Caleb Deeks
Sarah Harrison
Professor
John Loughhead
Jaee Samant
Tom Taylor
Doug Watkins
from 1 Sep 2018
Joanna
Whittington
from 8 Oct 2018
Gavin Lambert
from 15 Apr 2019
Sam Lister
from 15 Apr 2019

Accountability report
53
Our management: non-executive directors
Archie Norman
Board member
Nigel Boardman
from 25 Jun 2018
Board member,
Audit and Risk
Assurance
Committee
Stephen Carter
Board member
Claire Davies
Audit and Risk
Assurance
Committee
Louise Fisher
From 19 Feb 2019
Nominations
and Governance
Committee
Bryan Ingleby
Audit and Risk
Assurance
Committee
Myriam Madden
Audit and Risk
Assurance
Committee
Dame Carolyn
McCall
Board member
Leena Nair
from 25 Jun 2018
Board member,
Nominations
and Governance
Committee
Kathryn Parsons
Board member
Stuart
Quickenden
Board member,
Audit and Risk
Assurance
Committee
Adrian
Kamellard
from 10 Apr 2019
Audit and Risk
Assurance
Committee
Elaine Clements
from 10 Apr 2019
Audit and Risk
Assurance
Committee
Catherine
Pridham
from 20 Feb 2019
Project and
Investment
Committee
Leavers up to the reporting date
Those who left ministerial, executive and non-executive positions during the year
Professor Dame
Anne Dowling
to 31 May 2018
Non-executive:
Board member,
Nominations
and Governance
Committee
Charles Randell
to 30 Jun 2018
Non-executive:
Board member,
Audit and Risk
Assurance
Committee
Andrew Griffiths
MP
to 14 Jul 2018
Minister
Jeremy
Pocklington
to 27 Aug 2018
Executive director
Helen Shirley-
Quirk
from 29 Aug 2018
to 7 Oct 2018
Acting Director
General/ Executive
Director
Rachel Campbell
to 31 Oct 2018
Non-executive:
Nominations
and Governance
Committee
Sam Gyimah MP
to 30 Nov 2018
Minister
Lucy Shannon
to 31 Dec 2018
Non-executive:
Audit and Risk
Assurance
Committee
Richard
Harrington MP
to 25 Mar 2019
Minister
Gareth Davies
to 3 May 2019
Executive director

Annual report and accounts 2018-19
54
Governance statement
Report of the lead non-executive director
The BEIS Departmental Board
(the Board) has prioritised
embedding the Industrial
Strategy across all its work
this year. The department
marked the first year of the
Industrial Strategy in December
2018 and used this milestone
as impetus to develop a
challenging work programme,
where I, and the Board, pushed
BEIS senior management to be
innovative in their interactions
with business by:
• championing joint working in policy formation
and avoiding preconceptions;
• establishing a Shadow Executive Committee
and ensuring that the Co-Chairs have a route
to the Board through the Lead Non-Executive
and Permanent Secretary has enhanced the
Board’s access to wider employee views;
• setting the requirement for an annual
board event outside of the standard three-
hour department based meeting, enabling
members to engage with local representatives
and gain first-hand knowledge of key regional
industry issues; and
• challenging internal recruitment strategies to
ensure that we encourage inward movement
of individuals with relevant industry experience.
During the year the Board held wide ranging
discussions on subjects of key importance to
business, such as EU Exit, labour markets and
skills; audit and regulation; and actions to secure
our energy markets, including new technologies,
innovation and reducing carbon emissions. We
held a successful interactive session on the
Industrial Strategy’s Grand Challenges attended
by the BEIS Departmental Board, Whitehall
officials and business representatives.
The positive input of our new non-executive
board members, Nigel Boardman and Leena
Nair, with their considerable professional
experience, has been felt in board discussions
and at their respective committees. Throughout
the last year, the commitment, diligence and
fortitude of ministers and officials in managing
the challenges and uncertainty as we prioritised
EU Exit work, alongside other key priorities, has
demonstrated that we continue to be one of the
most effective departments in government.
Looking ahead
While the 2018 People Survey results for
BEIS showed encouraging progress in staff
engagement the BEIS Departmental Board are
not complacent. We will continue to challenge
BEIS to keep improving by implementing the
“Shaping our Future” programme to ensure
a more inclusive, highly professional and
high-performing department, modelling the
progressive practices we want to see across the
whole economy.
Departmental Board members and I will
use our position to encourage ministers and
officials to use the Industrial Strategy to create
an environment in the UK where business,
consumers and workers continue to develop,
innovate and lead.
Archie Norman
Lead Non-
Executive and
Deputy Chair of
Departmental
Board

Accountability report
55
Our board structure
Departmental
Board
Provides direction on
strategy, performance
and risk management
Nominations
and Governance
Committee
Senior remuneration
and appointments
Audit and Risk
Assurance
Committee
Quality of audit and
risk control functions
Executive Committee
Implements strategy and ensures the effective management of BEIS,
including EU Exit Programme business
Shadow
Executive
Committee
Staff
advisory body
People and
Operations
Committee
Effective
management of
human resources,
estates and digital
Performance,
Finance and
Risk Committee
Monitoring
frameworks for
BEIS performance
against targets,
budgets and risks
Projects and
Investment
Committee
Assurance of key
investment proposals
and projects
Shadow People
and Operations
Committee
Staff advisory body
PFR
Challenge Panel
Deep dive on
Departmental
Performance and Risks
PIC
Keyholder Panel
Assurance and
Investment Proposals
Register of interests
All Board members are required to declare
could be a conflict of interest or perceived as
any personal or business interests which may
one. Where a Board member has a specific
influence their judgement in discharging their
conflict of interest, additional mitigations are put
obligations, or which may be perceived to do so
in place. Typically, this means not taking part
by a reasonable member of the public. These
in related discussions at the Board or other
interests include, without limitation, personal
meetings. Biographies of our Board members
direct and indirect pecuniary interests and any
are available at https://www.gov.uk/government/
such interests of close family members or of
organisations/department-for-business-energy-
people living in the same household as the
and-industrial-strategy
Board member.
Two conflicts of interest were raised this year and
BEIS collects this information annually. We also
were managed in line with the relevant procedures.
ask Board members to inform the department
on any changes in their circumstances which

Annual report and accounts 2018-19
56
Departmental Board and its committees
Our Departmental Board held six meetings in 2018-19. The table below
summarises discussions governance and risk and operations.
The Rt Hon Greg Clark MP
Secretary of State and Chair
of Departmental Board
Discussion
Action
Progress
Strategy
Industrial
Strategy
The Board challenged policy makers to be innovative, to
demonstrate how they are engaging with business and
introducing this outlook in embedding the industrial Strategy.
BEIS made changes to our
organisational structure to
strengthen our delivery of the
Industrial Strategy.
EU Exit
The Board held discussions on departmental progress in
preparing for EU Exit, focused on the labour market, and
BEIS’s no deal planning.
The Board commissioned business
relate items and sector analysis to
discuss at future board meetings.
Independent
review of
the Financial
Reporting
Council
Following publication of an independent report, the Board
discussed the implications and connectivity of the reviews
with others into the UK audit market.
The Board has directed the
relevant Director General to review
the recommendations and develop
a plan to formally address them.
UK Research
and Innovation
(UKRI)
The Board considered the plans, structure and priorities for
UKRI’s first year of operation.
UKRI are expected to provide an
update at a future Board meeting.
Energy
Strategy
The Board discussed several topics on the energy strategy.
The Secretary of State responded to Dieter Helm’s Cost of
Energy Review.
A revised Energy Strategy is
due in 2019.
Review of
Apprenticeship
Scheme
The Board commissioned analysis of the scheme, which
included contributions from industry and the Department
for Education (DfE).
The Board agreed joint policy
working with DfE to address the
issues raised.
Oil and Gas
Authority
The Board requested the CEO to discuss in detail how the
authority was set up, resourcing, and how it engaged with
industry to develop its regulatory framework.
A series of lessons learned
summaries were developed
and shared.
Governance and risk
Objectives and
priorities for
the department
The Board provided challenge on BEIS’ forward work
programme for 2019 and continued setting priorities to
strengthen the department’s governance overall.
The work programme has been
amended based on the steer from
the Board.
Single
Departmental
Plan (SDP)
The Board’s discussion on BEIS objectives and priorities
has supported the development of the SDP.
The Lead Non-Executive Board
Member fed into the development
of the SDP.
Departmental
risk appetite
and risk
management
The Board endorsed the approach of the incoming Chair of
the Audit and Risk Committee and implemented changes
to strengthen how BEIS manages its risks and the risks of
arm’s length bodies.
The Board is expected to review to
the risk appetite statement in 2019.
Operations
People Survey
The Board considered results from the 2018 People Survey,
discussed options around staff attrition rates and requested
plans for raising engagement scores for middle management.
The Board endorsed the “Shaping
our Future” programme.
Transformation
programme
The Board challenged BEIS to consider how it needs to
engage business and integrate industry knowledge into
the organisation.
BEIS has identified key
stakeholders, implemented
communication strategies and
partnership working.

Accountability report
57
Nominations and Governance Committee
The success of any organisation is based on valuing its people and having
an effective strategy for personal and career development. Nominations and
Governance committee has focused on:
• systems to identify and develop talented senior civil servants;
• plans for orderly succession of appointments to the Board, Director General
and Director roles;
• bringing in a new performance management process for grades across BEIS
following an extensive staff consultation exercise;
• attraction and retention strategies for staff across BEIS; and
• the “Shaping our Future” programme to ensure BEIS is an inclusive,
professional and high performing department.
Audit and Risk Assurance Committee (ARAC)
ARAC ensures we have a clear grip of our management of risk and finance.
ARAC has focused on:
• the overall control environment including risk and governance arrangements;
• shaping the approach to a BEIS Risk Appetite Statement;
• improving the risk management framework, and testing embedding the
framework within Directorates in BEIS;
• assuring cyber and information security and counter fraud and whistleblowing
practices; and
• building stronger relationship with Partners Organisations.
Executive Committee (ExCo)
ExCo ensures the effective management of BEIS by looking at our key strategic
priorities, workstreams and programmes. In the last year, ExCo has focused on:
• business planning and the Single Departmental Plan 2019-20;
• the diversity and inclusion strategy, including outcomes of surveys conducted
by the Faith and Minority Ethnic Group;
• People Survey and its outputs;
• the refresh of the Departmental Risk Register;
• the new “Shaping our Future” programme, which builds upon the
Transformation programme; and
• the Industrial Strategy one year on.
In addition, the committee hold fortnightly meetings on the EU Exit programme
to manage identified EU Exit related issues. A key tool that was used was the
EU Exit programme dashboard which includes progress of priority issues,
business intelligence and risk assessment. It also receives assurance on its EU
Exit work from external partners including: Cabinet Office, Infrastructure and
Projects Authority and the Government Internal Audit Agency.
Leena Nair
Non-Executive
and Chair of
Nominations
and Governance
Committee
Nigel Boardman
Non-Executive and
Chair of Audit and
Risk Assurance
Committee
Alex Chisholm
Permanent
Secretary
and Chair of
the Executive
Committee

Annual report and accounts 2018-19
58
People and Operations Committee (POpCo)
POpCo is a delegated committee of ExCo. It considers
matters relating to human resources, accommodation,
security and IT. Over the last year, POpCo has focused on:
• monitoring the success of the new performance
management system for 2018-19;
• the shared services unification process;
• establishing the BEIS graduate and experienced entrant
programme;
• reviewing the health and safety policy; and
• overseeing the works of the estate and security team.
Performance, Finance and Risk Committee (PFR)
PFR is a delegated committee of ExCo. It considers matters
relating to BEIS performance, budgets and risks. PFR met
10 times last year and its focus included:
• ensuring the effective implementation of internal control
recommendations;
• strengthening ties with Partner Organisations;
• advising teams on progressing project delivery;
• overseeing our financial management and allocating
resources; and
• business case reviews outside the remit of the Projects
and Investment Committee.
Projects and Investment Committee (PIC)
PIC is a delegated committee of ExCo and reviews
investments over £20 million, or those deemed risky, novel
or contentious, to ensure that they are aligned with the
department’s objectives. It met 19 times last year, and
focused on:
• streamlining acceleration of business cases;
• supporting the robust development of business
cases; and
• accelerating EU Exit related business cases to ensure
prompt approval.
Jaee Samant
Co-Chair People
and operations
committee
Sam Beckett
Co-Chair People
and operations
committee
Julian Critchlow
Co-Chair
Performance,
Finance and Risk
Committee
Sarah Harrison
Co-Chair
Performance,
Finance and Risk
Committee
Gareth Davies
Co-Chair Projects
and Investment
Committee
Nick Chism
Co-Chair Project
and Investment
Committee

Accountability report
59
Board and committee attendance
The table below shows board attendance from 1 April 2018 to 31 March 2019. Where members were
unable to attend meetings in person, they have been able to share their views in advance with the chair.
Departmental
Board
Nominations
and Governance
Committee
Audit and Risk
Assurance
Committee
Executive
Committee
Number of meetings held
6
3
5
21
Ministers
The Rt Hon Greg Clark MP
6/6

The Rt Hon Claire Perry MP
6/6

Richard Harrington MP (left 25 Mar 2019)
6/6

Executive directors/committee members
Alex Chisholm
6/6
3/3
4/5
18/21
Sam Beckett

19/21
Nick Chism (from 1 Jun 2018)
13/17
Julian Critchlow (from 14 May 2018)
15/18
Gareth Davies

15/21
Caleb Deeks
21/21
Sarah Harrison
6/6
3/5
20/21
Professor John Loughhead

12/21
Jeremy Pocklington (to 27 Aug 2018)
6/7
Jaee Samant
6/6

18/21
Helen Shirley-Quirk (from 29 Aug 2018
to 7 Oct 2018)

2/2
Tom Taylor
6/6
5/5
21/21
Doug Watkins (from 1 Sep 2018)
2/3
12/14
Joanna Whittington (from 8 Oct 2018)
8/11
Alice Hurrell (Nominations Committee
from 6 Aug 2018)
1/1
Non-executive directors
Archie Norman
6/6

Nigel Boardman (from 25 Jun 2018)
5/5
5/5

Rachel Campbell (to 31 Oct 2018)

0/1

Stephen Carter
5/6

Claire Davies

5/5

Professor Dame Anne Dowling
(to 31 May 2018)
1/1
1/1

Louise Fisher (from 19 Feb 2019)
1/1

Bryan Ingleby

5/5

Myriam Madden

4/5

Dame Carolyn McCall
2/6
Leena Nair (from 25 Jun 2018)
1/4
2/2
Kathryn Parsons
4/6
Stuart Quickenden
(ARAC from Nov 2018)
6/6
1/2
Charles Randell (to 30 Jun 2018)
1/1
2/2
Lucy Shannon (to 31 Dec 2018)
1/3

Annual report and accounts 2018-19
60
Compliance with the
corporate governance code
The department’s approach to governance
is in line with the Cabinet Office’s Corporate
Governance in Central Government
Departments: Code of Good Practice, (the Code),
with two exceptions.
The Code advises on having a roughly equal
numbers of ministers, senior civil servants,
and non-executives from outside government
whereas in BEIS there are a higher number of
non-executives. This is because the breadth
of departmental business means that the
department needs additional business skills and
expertise to help it in its objectives to promote
trade, boost innovation and help business to
grow in a competitive economy.
The BEIS Departmental Board agreed when
it was formed in 2016 that risk appetite and
tolerance levels would emerge through the early
decisions on major strategic issues, and the
areas it chose to focus on, rather than an explicit
exercise to define risk appetite. As a result, in
2018 the Board has primarily focused its views
in relation to risk over the last 12 months on
the Industrial Strategy, the UK’s exit from the
EU, achieving clean growth and transforming
BEIS as a department. During 2019-2020
BEIS will be considering a departmental risk
appetite statement to support risk-based
decision making.
Quality of data used by
the Board
The BEIS Departmental Board meetings
covered a variety of topics, which provided
guidance, to improve key strategies, policy
creation and governance and risk management
approaches. The meetings were efficient, board
papers were of high quality, and challenge was
encouraged. BEIS’s governance team provided a
comprehensive secretariat service to the Board
and its committees to ensure the effective
and efficient administration of the Board and
its activities.
Board’s evaluation of its
effectiveness
All departments are requested by Cabinet Office
to carry out a board effectiveness evaluation for
2018-19, covering the period of 1 April 2018 to 31
March 2019. The Board completed a thorough
self-assessment, with the aim of looking to
confirm that the actions taken to improve the
Board have been beneficial and to identify
potential areas that require action for 2019-20.
Results 2018-19:
• BEIS Director Generals were asked for their
views on both the Board and how to draw on
Non-Executive experience more frequently.
• Board members agreed that the push to
ensure agenda items focused on the Industrial
Strategy and its impacts on the work of the
Department, its reach and work with partners
was successful.
• The Board were content with the timing of
the papers and that the introduction of Board
Intelligence had facilitated this.
• There was positive feedback on how the
Board was run by the Governance Team,
with particular note taken of the quality and
timely receipt of papers. However, the Board
recognised the challenges faced around timing
to enable full discussion of complex and wide-
reaching subject areas.

Accountability report
61
As a result of the evaluation, the Board agreed
a series of actions for the forthcoming year so
that it continues to improve its effectiveness and
efficiency. These were:
• building on Board engagement with other
government departments and Partner
Organisations by having one item with external
participants on each agenda;
• bringing in one or two board apprentices from
under-represented groups. These could be on
a one-year term and sourced from near-miss
candidates from the BEIS public appointments
process or ‘up and coming’ talent from Whitehall;
• ensure presenters are in the room to observe
the preceding item to aid their understanding
of Board dynamics and provide context for
their participation; and
• consider revising the scheduling of the Board from
a Monday if deemed necessary to protect against
fluctuations in senior ministerial attendance.
Partner organisation
governance
We have one of the largest networks of partner
organisations in government, with a diverse range
of bodies. Over the financial year 2018-19, BEIS
had 40 partner organisations with a wide span
of policy and operational responsibilities. We
receive assurance on risks and delivery through;
the BEIS corporate reporting system; policy
colleagues through the sponsorship model;
partner organisations governance statements;
and our ARAC members engaging with individual
partner organisation ARACs.
Significant issues arising within individual partner
organisations are covered in their governance
statements. They were not considered significant
for inclusion in the departmental governance
statement for 2018-19.
Local government
In 2018-19, we provided £27.5 million as grants
to local authorities under section 31 of the Local
Government Act 2003.
Review of the effectiveness of
risk management and internal
controls
The review of the effectiveness of our risk
management and internal controls have been
informed by officials, the annual internal audits
carried out by the Government Internal Audit
Agency (GIAA) and comments made by
the National Audit Office (NAO). Our ARAC
committee also provided further assurance.
BEIS has continued to make improvements to
the governance, risk management and control
environment. To date for 2018-19, no audits have
received an unsatisfactory opinion and only three
a limited opinion, for which actions are in hand
to address the recommendations made by the
internal auditors.
BEIS has been able to achieve this while
committing resource to EU Exit preparations
and implementing complex policy programmes
such as the Industrial Strategy and Clean Growth
Strategy. GIAA’s annual opinion concluded that
our department is as well placed as it can be in
its preparedness to deliver EU Exit, successfully
establishing the capacity and skills to deliver its
obligations and putting in place the governance
structures required to oversee delivery.
More broadly our department has taken steps
to improve its capability and capacity in other
areas with appointments in key Corporate
Services roles, creation of a broader Director
General group structure, and the launch of a
new Transformation programme, transitioning to
a single shared service provider. Internal Audit
feel BEIS now has the right foundations in these
areas and is starting to develop tools that have
the potential to be ‘best in government’, although
they will take time to embed.

Annual report and accounts 2018-19
62
Progress made on risk management
Our risks profile is provided in the performance
overview section of the report. During 2018 our
department embedded its risk management
framework. This has been achieved through
the introduction of group risk registers, Deputy
Director Risk Champions, quarterly risk
conversations at group senior management
teams and drop-in sessions for staff to
seek specialist advice on implementing risk
management. These processes have started to
enable better risk management and increased
consistency across the department.
In addition, we have undertaken work to enhance
our risk management capability. We have:
• strengthened monthly reporting processes,
conducting specific reviews on departmental
risks at senior committees;
• run risk management escalation/de-escalation
processes, so accountable individuals are
aware of emerging and existing risks;
• developed a risk tool, to help BEIS manage
risks more effectively in real-time; and
• cultivated networks with risk functions across
government to share best practice and engage
with cross-government developments.
We have also strengthened our approach
to risk management with our partner
organisations (POs). From October 2018, 25
of the Department’s 40 POs started reporting
on their risks to BEIS quarterly as part of the
Corporate Risk Reporting. The remaining POs
are not required to report as they are advisory
committees or single office holders. The reports
are prepared by policy teams, engaging with
their respective POs, and Corporate Governance
Sponsors provide challenge. Any PO risks
that need to be discussed or escalated will
be raised with the Performance, Finance and
Risk Committee and subsequently ExCo if
appropriate. This new framework provides an
overview which is less narrative and more visual;
with better quality information to allow for an
improved understanding of risks and issues
being addressed with POs.
Internal controls environment
Our department has made good progress in
reducing the number of internal audit actions
that are open, which is helping to address
weaknesses in controls and processes. We also
successfully piloted a Controls and Assurance
Record during 2018-19 that is providing a means
of assessing how well the department’s systems
and processes are being operated.
We have also completed several projects to
help improve controls in critical areas of financial
management. This includes taking positive steps
to improve expense processes, enabling staff to
more easily provide proof of expenditure through
the adoption of new technology. Steps have also
been taken to increase compliance with HMRC
rules by reviewing travel data to identify staff who
potentially fall into the category of having more
than one permanent place of work. In addition,
we have put in place additional checks to
strengthen the management of contingent labour
contracts that are potentially supplying services
through an intermediary.
While there have been great improvements, work
continues to refine and strengthen the take-up
and compliance with departmental corporate
policies. This will be achieved through ensuring
clear policies are in place, supported by effective
processes, with better data and information
available to managers and leadership to judge
progress, and ensure that appropriate measures
are put in place where areas of weakness are
identified.
Ministerial directions
There were no ministerial directions in 2018-19.
Ministerial directions are instructions from the
Secretary of State which allow the department
to proceed with a spending proposal where
the Accounting Officer has raised an objection
around regularity, propriety, value for money
or feasibility.

Accountability report
63
Data protection
BEIS notified the Information Commission’s Office
(ICO) of four personal data breaches assessed as
meeting the ICO’s reporting guidelines. The ICO
determined regulatory action was not appropriate
in each case but made a few recommendations
for action by BEIS.
Information security
No significant cyber security breaches were
reported in 2018-19. Denial of service attacks
and attacks via malicious software are
continuing risks to the department. These risks
are reviewed by our security team and our
commercial partners and appropriate mitigations
put in place. We continue work to ensure all
internal IT services comply with the ISO27001
security standard.
Counter-fraud and error
We have continued to investigate and prevent
instances of fraud and recover funds where
possible. During the year, levels of fraud detected
across the BEIS group of organisations were
slightly below the previous year. Levels of fraud
prevented increased, as well as successful
prosecutions of frauds committed in previous
years. There was a marked increase of attempted
frauds against the public imitating BEIS and its
partner organisations. We will keep monitoring
these trends.
We have worked with the Government Internal
Audit Agency to implement recommendations
to improve our department’s effectiveness. We
built on last year’s fraud awareness programmes
delivered to BEIS staff by introducing mandatory
fraud awareness training for BEIS staff that work
in areas at risk of fraud. We also revised our
Counter Fraud Action plan to ensure a consistent
approach to managing fraud risks. We achieved
an overall ‘green’ rating.
Effectiveness of our whistle
blowing arrangements
Internal whistle blowing
Our procedures offer six different routes for
employees to raise concerns, which include an
external whistleblowing hotline. Our policy and
procedures are accessible to all employees on
our intranet and our Line Manager’s Handbook.
We have a low number of whistleblowing
concerns raised each year; there are no common
themes or specific risks identified across the
cases. In our 2018 People Survey, a clear
majority of staff said they had confidence any
concerns raised under the Civil Service Code
would be properly investigated. This result was
above the average People Survey score for the
rest of the Civil Service.
External whistle blowing
A small number of whistle blowers came forward
in 2018-19 with concerns which were investigated
by those best placed to deal with them. While
it is encouraging that whistle blowers did come
forward, we want to do more to support them
and to consider if (within the law) we can improve
the feedback we give them. We will be taking
this forward next year working with colleagues
and external organisations with interests in
supporting whistleblowing.
Quality assurance modelling
BEIS has had a single modelling quality
assurance (QA) process since April 2017, which
complies with the AQuA book. Our modelling
integrity team provide independent assurance for
models and plans. This ensures our models are
based on appropriate understanding of evidence
and risks. We have identified 87 analytical models
in use across BEIS with 87% of these reaching
their individual target QA compliance scores or
better, raising the BEIS average score to 91%.
Those models that are non-compliant have plans
to reach compliance targets in 2019-20. Our
Partner Organisations that undertake modelling
give assurance they have AQuA compliant
QA processes in place via their respective
Accounting Officer’s statements.

Annual report and accounts 2018-19
64
Accounting Officer’s conclusion
I have considered the evidence provided
regarding the production of the annual
Governance Statement and the independent
advice and assurance provided by the Audit and
Risk Assurance Committee. I conclude that the
department has again achieved a ‘moderate’
level of assurance. This assessment is strongly
supported by the wide range of internal audits
undertaken throughout the year.
This has been achieved while making
progress in improving the department’s
corporate processes, including addressing
the actions identified in the 2017-18 accounts.
Improvements have been realised in the
department’s corporate systems and processes
through the work of Business Partner teams,
embedding the sponsorship model for Partner
Organisations, introducing a new online IT
service management tool to support users,
and improvements to risk management and
corporate performance reporting. This includes
a new online performance reporting tool, which
has helped support business areas in identifying
and managing their financial, personnel and
operational risks.
During 2019-20, we will build on the foundations
we have established, with a focus on:
• proactively influencing across Whitehall to
support delivery of the Industrial Strategy;
• maintaining the focus on EU Exit preparations
and implementation;
• fostering a culture of compliance with the
Department’s corporate policies and processes;
• further refinement to internal governance, risk
management and spending controls; and
• undertaking further improvement to the
governance framework for managing
Partner Organisations.
Alex Chisholm
Permanent Secretary and
Principal Accounting Officer
8 July 2019

Accountability report
65
Staff report
This has been a year of excellent progress
for BEIS people. We have continued to make
progress in key areas for the department,
including Diversity and Inclusion, Learning and
Development and people engagement, against
the challenging context of building EU Exit
capacity and capability. Our EU delivery has
been notable, ensuring the organisation has the
resources, talent and skills it needs to deliver this
wide-reaching agenda.
Our people with disabilities
BEIS is committed to ensuring equality for all
our people, including those with disabilities. As
we make clear in our job application process,
candidates with a disability who apply for a post
in BEIS (under the Guaranteed Interview Scheme)
automatically go forward to the interview stage,
provided they satisfy the minimum criteria.
We also promote external vacancies in a
range of diversity media. All staff are required
to take training in diversity and inclusion and
unconscious bias. We have achieved Disability
Confident Leader Level 3, an independent
validation of our inclusive policies and
procedures. Where staff are identified as needing
reasonable adjustments, these will be provided.
We have an active and engaged Capability
Action Network (CAN) which works directly with
HR and other areas of the department to create
positive change. As a result of feedback from
CAN on developing line managers understanding
of disability, all new line managers will now
undertake the disability ‘inclusive management
course’ as part of their induction. The course is
available as a civil service learning resource.
Sickness and absence data
Average working days lost to sickness absence
for the core Department, UK Space Agency,
and Insolvency Service for the 12 months to 31
March 2019 was 2.7, 6.8 and 6.4 respectively.
BEIS is committed to supporting the physical
and mental health of its people and fostering
employee wellbeing is a key element of our
focus. We have in place an employee assistance
provider to offer additional support to our people,
and a comprehensive offer including ‘Wellbeing
Competent Leaders’ and resilience support
for teams.
Other people progress during the year
Shaping our Future
We launched ‘Shaping our Future’ at the beginning of
2019 – our new programme of work in making BEIS
a great place to work. It is a three-year plan focusing
on diversity and inclusion, improving processes,
coaching and learning, understanding business,
innovation and digital. Plans were developed using
the intelligence and ambitions described from
consultation with senior leaders, several internal
groups, analysis of the People Survey results and
research into the changing working environment.
Our former Transformation programme, which launched
in 2017, delivered several critical improvements,
including a new pay deal which takes BEIS into the
top 50% across Whitehall, a new governance model
for our 40 partner organisations, a new performance
management system (PMS), an overhaul of technology,
launch of the BEIS intranet, several new processes, and
extensive business skills training.

Annual report and accounts 2018-19
66
BEIS is a proud member of the
above schemes

Baby of BEIS employee who enjoyed the
benefits of shared parental leave in 2018-19
Diversity and inclusion
As the department responsible for creating an
‘economy that works for everyone’, we focus heavily
on diversity and inclusion. During the year we have:
• increased the diversity of our workforce;
• rolled out micro behaviours training to over 500 staff;
• consulted nationally on Ethnicity Pay Reporting;
• undergone the Stonewall Workplace Equality
Index; assessment;
• in the 2018 staff survey, increased our ‘Inclusion and Fair
Treatment’ score from 80% in 2017 to 83% in 2018.
Shared parental leave
During 2018-2019, 35 of our employees took advantage
of the government’s Shared Parental Leave scheme.
We continue to promote the flexibility our internal shared
parental leave policy offers our employees.
Gender pay gap
Details of our Gender Pay Gap at 31 March 2018 together
with the actions we are committed to take can be found
at: https://www.gov.uk/government/publications/beis-
gender-pay-gap-report-and-data-2018. A report for 2019
will be published later this year.
Health, safety and wellbeing
We consider the wellbeing of our people to be
paramount. We have an exceptionally good
wellbeing offer which covers training in resilience,
stress management and we offer counselling from
our Employment Assistance Programme. We run
events covering all areas of wellbeing, including
talks on mental health, disability awareness and an
annual sports day. We have trained over 120 Mental
Health First Aiders who are based throughout our
offices. The Mental Health First Aider role gives first
support to those who seek help due to a mental
health concern.
We have a strong record in providing a safe and
supportive work environment. There were three
reported injuries in 2018-19 that are within the
Reporting of Injuries, Diseases and Dangerous
Occurrences Regulations 2013. We encourage staff
to ask for reasonable adjustments as part of our
commitment to health and safety and our workstation
assessment programme. An internal audit review
was carried out in 2017 by Government Internal Audit
Agency and all actions have been cleared satisfactorily.

Accountability report
67
Trade Union facility time
Facility time is time-off to employees, paid or unpaid to undertake trade union activities as a union
representative. The table below shows facility time data for our core Department and agencies
for 2018-19.
2018-19
Core
Department
and agencies1
Other agencies
not consolidated
in the accounts2
Total
Union officials
Number of employees who were relevant Union Officials
40
43
83
Full-time equivalent persons
37.90
38.49
76.39
No. of employees by working hours spent on facility time
0% of working hours
7
0
7
1 - 50% of working hours
33
42
75
51 - 99% of working hours
0
1
1
100% of working hours
0
0
0
Facility time as a percentage of pay bill
Total cost of facility time (£)
£97,666
£180,117
£277,783
Total pay bill (£)
£251,842,000
£177,277,000
£429,119,000
as a percentage of total pay bill
0.04%
0.10%
0.06%
Paid trade union activities
(hours spent on paid Trade Union activities ÷ total paid
facility time hours) * 100
0.00%
5.47%
3.93%
Notes
1.
Agencies consolidated in the Departmental Group accounts: Insolvency Service and UK Space Agency
2.
Other agencies not consolidated in the Departmental Group accounts: Companies House, Intellectual Property
Office and Met Office

Annual report and accounts 2018-19
68
Staff composition as at 31 March 2019
Our staff composition data is compiled using full-time equivalent staff numbers on payroll.
Gender
Men
Women
Total
Executive Committee
8
4
12
All senior civil servants
131
111
242
All employees
2,096
1,870
3,966
All employees %
53%
47%
100%
Disability
Declaration rate: 62%. Representation for staff who have declared:
81%
80%
Yes
Prefer not to say
No
86%
10%
4%
Ethnicity
Declaration rate: 79%. Representation of staff who have declared:
81%
80%
BAME
Prefer not to say
White
78%
18%
4%
Sexual orientation
Declaration rate: 67%. Representation of staff who have declared:
81%
80%
LGBT+
Prefer not to say
Straight
84%
8%
8%

Accountability report
69
Number of Senior Civil Servants (SCS) staff by salary band
The following table shows the number of senior civil servants by salary range as at 31 March 2019
in the core Department. Bonuses are not included and salary ranges represent actual salary rates.
These pay ranges cover staff employed on open-ended and fixed term contracts.
Remuneration of senior civil servants who are outside of the Departmental Board or Executive
Committee is based on performance ratings determined by Permanent Secretary and Director
Generals. The Permanent Secretary and Director Generals during 2018-19 are presented in the box
on the right below.
Salary range
Number of
SCS staff as
at 31 March
2019
Number of
SCS staff as
at 31 March
2018
Below £59,999
0
0
£60,000 - £64,999
3
2
£65,000 - £69,999
74
77
£70,000 - £74,999
54
43
£75,000 - £79,999
21
18
£80,000 - £84,999
13
6
£85,000 - £89,999
9
18
£90,000 - £94,999
26
16
£95,000 - £99,999
6
6
£100,000 - £104,999
5
5
£105,000 - £109,999
2
0
£110,000 - £114,999
3
2
£115,000 - £119,999
2
2
£120,000 - £124,999
5
7
£125,000 - £129,999
5
2
£130,000 - £134,999
3
2
£135,000 - £139,999
1
1
£140,000 - £144,999
3
2
£145,000 - £149,999
1
2
£150,000 - £154,999
0
0
£155,000 - £159,999
1
0
£160,000 - £164,999
2
0
£165,000 - £169,999
0
0
£170,000 - £174,999
1
0
£175,000 - £179,999
0
0
£180,000 - £184,999
2
1
£185,000 - £189,999
0
0
£190,000 - £194,999
0
0
£195,000 - £199,999
0
1
Total
242
213
Permanent Secretary and Director Generals
1 April 2018 to 31 March 2019
Alex Chisholm
Permanent Secretary
Sam Beckett
Director General, EU Exit and Analysis
Nick Chism
Director General, Enterprise
(from 1 Jun 2018)
Julian Critchlow
Director General, Energy Transformation
(from 14 May 2018)
Gareth Davies
Director General, Business and Science
Sarah Harrison
Director General, Corporate Services
Professor John Loughhead
Chief Scientific Advisor
Jeremy Pocklington
Director General, Energy and Security
(to 27 Aug 2018)
Jaee Samant
Director General, Market Frameworks
Helen Shirley-Quirk
Acting Director General, Energy and
Security (from 29 Aug to 7 Oct 2018)
Joanna Whittington
Director General, Energy and Security (from
8 Oct 2018)

Annual report and accounts 2018-19
70
Analysis of staff numbers and costs
audited information
Staff numbers
The average number of full‑time equivalent persons employed in 2018-19 is shown in the table below.
Number of staff by category
2018-19
2017-18
Permanent
employed
staff
Others
Ministers
Special
advisers
Total
Total
Core
3,776
277
6
3
4,062
3,378
Agency
1,696
47
-
-
1,743
1,612
Non departmental public
bodies (NDPBs)
13,621
941
-
-
14,562
13,786
Total
19,093
1,265
6
3
20,367
18,776
Of which:
Core Department and agencies
5,472
324
6
3
5,805
4,990
NDPBs and other
designated bodies
13,621
941
-
-
14,562
13,786
Total
19,093
1,265
6
3
20,367
18,776
Staff costs
During the year, £18,519,467 of staff costs were capitalised, (2017-18: £13,932,358) and 386
employees (2017-18: 294 employees) in the Departmental Group were engaged on capital projects
during the reporting period.
Staff severance costs for current and prior year are included in wages and salaries. Further detail on
exit packages is included on page 72.
Included within the total net costs of other staff shown below are ministers’ total net costs of £329,921
(2017-18: £344,959) and special advisors’ total net costs of £272,475 (2017-18: £181,693).
2018-19
2017-18
Permanently
employed staff
£m
Others
£m
Total
£m
Total
£m
Wages and salaries
785
70
855
779
Social security costs
86
-
86
81
Other pension costs
179
-
179
168
Sub total
1,050
70
1,120
1,028
Less recoveries in respect of outward
secondments
(1)
-
(1)
(3)
Total net costs
1,049
70
1,119
1,025
Of which:
Core Department and agencies
309
21
330
273
NDPBs and other designated bodies
740
49
789
752
Total net costs
1,049
70
1,119
1,025

Accountability report
71
Pension schemes
Principal Civil Service Pension Scheme
Nuclear site licence companies are not included in these pension schemes. The Principal Civil Service
Pension Scheme (PCSPS) and the Civil Servant and Other Pension Scheme (CSOPS), known as
“Alpha”, are an unfunded multi-employer defined benefit scheme in which the department is unable
to identify its share of the underlying assets and liabilities. The scheme actuary valued the PCSPS as
at 31 March 2016. Further details can be found in the resource accounts of the Cabinet Office Civil
Superannuation (www. civilservicepensionscheme.org.uk/about-us/resource-accounts/).
For 2018-19, employer contributions of £65,627,469 were payable to the PCSPS (2017-18:
£55,532,213) at one of four rates in the range 20.0% to 24.5% (2017-18: 20.0% to 24.5%) of
pensionable pay, based on salary bands.
The scheme’s actuary reviews employer contributions usually every four years following a full scheme
valuation. The contribution rates are set to meet the cost of the benefits accruing during 2018-19 to be
paid when the member retires and not the benefits paid during this period to existing pensioners.
Employees can opt to open a partnership pension account, a stakeholder pension with an employer
contribution. Employers’ contributions of £1,192,970 (2017-18: £1,023,802) were paid to one or more
of the panel of three appointed stakeholder pension providers. Employer contributions are age-
related and range from 8% to 14.75%. Employers also match employee contributions up to 3% of
pensionable earnings. In addition, employer contributions of £12,811 (2017-18: £15,704), 0.5% (2017-
18: 0.5%) were payable to the PCSPS to cover the cost of the future provision of lump sum benefits
on death in service and ill health retirement of these employees.
Contributions due to the partnership pension providers at 31 March 2019 were £38,599 (2017-18:
£27,666). Contributions prepaid at that date were £nil (2017-18: nil).
In 2018-19, 18 persons (2017-18: 28 persons) across the Departmental Group retired early on ill-health
grounds; the total additional accrued pension liabilities in the year amounted to £1,134,823 (2017-18:
£1,749,313).
Other pension schemes
Employer contributions to other pension schemes in 2018-19, amounted to £261,129,179 (2017-18:
£234,198,424). Employer contributions include employers’ contributions, current service costs and
where appropriate past service costs of funded pension schemes. Further details can be found in the
accounts of the department’s NDPBs and other designated bodies. A list of these bodies is provided
in note 28.
Nuclear site licence companies: staff numbers and costs
Nuclear site licence staff costs are disclosed separately as they are included in the amounts shown for
utilisation in the NDA Decommissioning provision in note 19 rather than being reported as staff costs
in the Statement of Comprehensive Net Expenditure.
2018-19
2017-18
Permanently
employed staff
Others
Total
Total
Number of staff (full‑time equivalent)
14,555
1,314
15,869
16,163
Wages and salaries (£m)
780
46
826
835
Social security costs (£m)
88
-
88
90
Other pension costs (£m)
148
-
148
135
Less recoveries in respect of outward
secondments (£m)
-
-
-
-
Total costs (£m)
1,016
46
1,062
1,060

Annual report and accounts 2018-19
72
Exit packages
audited information
Redundancy and other departure costs have been paid in accordance with the provisions of the
Civil Service Compensation Scheme, a statutory scheme made under the Superannuation Act 1972.
Exit costs are accounted for in full in the year that the departure is agreed and are based on the
expected cost in relation to that financial year. Where the department has agreed early retirements,
the additional costs are met by the department and not by the Civil Service Pension Scheme. Ill-health
retirement costs are met by the pension scheme and are not included in the table.
Any organisations that are covered by the Civil Service Pension Scheme are subject to the £95,000
cap on exit payments. This is only a guideline rather than legislation, and organisations can apply to
pay over the cap subject to Cabinet Office’s approval. During 2018-19, there was no exit package
(2017-18: One exit package of £108,054) above £95,000 awarded by the core Department.
In November 2016, an amendment to the Civil Service Compensation Scheme introduced a new lower
tariff for all exit schemes (voluntary exit, voluntary redundancy and compulsory redundancy). This
amendment was subsequently challenged under a Judicial Review, which resulted in it being quashed
in 2017-18, and adjustments were required to some awards made under the November 2016 terms. As
result, in 2018-19, no exit packages (2017-18: 3) paid by the department required additional payments.
Number of compulsory
redundancies
Number of other
departures agreed
Total number of exit
packages by cost band
Exit package cost band
2018-19
2017-18
2018-19
2017-18
2018-19
2017-18
Less than £10,000
7
6
23
41
30
47
£10,000 - £25,000
33
17
25
77
58
94
£25,000 - £50,000
13
21
25
89
38
110
£50,000 - £100,000
-
-
13
124
13
124
£100,000 - £150,000
1
-
4
39
5
39
£150,000 - £200,000
-
-
-
11
-
11
More than £200,000
-
-
-
11
-
11
Total number of exit packages
54
44
90
392
144
436
Of which:
Core Department
and agencies
-
-
8
10
8
10
NDPBs and other
designated bodies
54
44
82
382
136
426
Total number of exit packages
54
44
90
392
144
436
Total cost (£)
1,092,442
1,046,881
2,947,889
23,457,006
4,040,331
24,503,887
Of which:
Core Department
and agencies
-
-
677,852
594,655
677,852
594,655
NDPBs and other
designated bodies
1,092,442
1,046,881
2,270,037
22,862,351
3,362,479
23,909,232
Total
1,092,442
1,046,881
2,947,889
23,457,006
4,040,331
24,503,887

Accountability report
73
Staff on loan
As at 31 March 2019, 34 members of staff permanently employed by the core Department were
attached on loan to other organisations on a short-term basis (loan duration up to six months) and
64 staff on a long-term basis (loan duration longer than six months). 29 people were attached to the
core Department on loan from other organisations on a short-term basis and 55 on a long-term basis.
Costs relating to staff on short-term loans were charged to Administration budgets in cases where the
core Department paid the cost or would have been charged to Administration budgets had the core
Department paid the cost.
Grade
Outward staff loans
Inward staff loans
Less than 6
months
More than 6
months
Less than 6
months
More than 6
months
Administrative assistant
-
-
-
1
Executive officer
-
11
5
2
Higher executive officer
6
12
3
3
Senior executive officer
5
6
3
7
Grade 7
14
21
9
22
Grade 6
5
10
4
11
Senior civil service
4
4
5
9
Total
34
64
29
55

Annual report and accounts 2018-19
74
Off-payroll engagements
Off-payroll engagements refer to workers paid off-payroll, without deducting tax and national
insurance at source, typically contractors. In 2018-19, BEIS released new guidance and a more
robust process to determine whether workers fall into off-payroll or on-payroll arrangements. The new
process has been shared across the BEIS family.
The tables below present data on our off-payroll engagements. Tables 1a, 2a and 3a exclude the
nuclear site licence companies; they are disclosed separately in tables 1b, 2b and 3b. Organisations
within the reporting boundary, which have no employees and staff costs, have been excluded.
Table 1a: Off-payroll engagements as of 31 March 2019, for more than £245 per day and
that last longer than 6 months
At time of reporting, number that have existed for:
Total
number
Less
than 1
year
1 to 2
years
2 to 3
years
3 to 4
years
4 years
or more
Core Department and agencies
Core Department1
91
26
42
5
18
0
Insolvency Service
10
10
0
0
0
0
UK Space Agency
13
9
3
1
0
0
Consolidated in Departmental Group accounts
(excluding nuclear site licence companies)
Advisory, Conciliation and Arbitration Service
6
0
6
0
0
0
British Business Bank plc
18
4
8
4
2
0
Civil Nuclear Police Authority
7
4
2
0
1
0
Coal Authority
1
0
0
1
0
0
Competition Appeal Tribunal and Competition Service
1
0
0
0
0
1
Diamond Light Source Ltd
8
3
1
1
2
1
Low Carbon Contracts Company Ltd and Electricity
Settlements Company Ltd
1
1
0
0
0
0
Nuclear Decommissioning Authority
23
10
9
1
1
2
LRadioactive Waste Management Ltd
21
3
11
1
2
4
LNDA Archives Ltd
1
1
0
0
0
0
Oil and Gas Authority
1
0
1
0
0
0
UK Research and Innovation
25
12
8
2
1
2
UK Shared Business Services Ltd
13
4
8
1
0
0
UK Atomic Energy Authority
62
14
24
7
0
17
Not consolidated in the Departmental
Group accounts
British Hallmarking Council
0
0
0
0
0
0
Groceries Code Adjudicator
1
0
1
0
0
0
Pubs Code Adjudicator
2
0
1
1
0
0
Total
305
101
125
25
27
27
1 The core Department’s contingent labour requirements are principally driven by ensuring the
department has access to the right skills and capacity to manage delivery of its obligations in
preparing to deliver EU Exit.

Accountability report
75
Table 2a: New off-payroll engagements, or those that reached 6 months in duration,
between 1 April 2018 and 31 March 2019, for more than £245 per day and that last longer
than 6 months
Total number
Number assessed as
in scope of IR35 tax
assessment
Number assessed as
outside scope of IR35 tax
assessment
Number engaged directly (via
PSC contracted to BEIS) and
are on BEIS payroll
No. of engagements
reassessed for consistency/
assurance purposes during
the year
No. of engagements
that saw change to
IR35 statusfollowing the
consistency review
Core Department
and agencies
Core Department
66
7
59
0
0
0
Insolvency Service
10
7
3
0
10
10
UK Space Agency
13
2
11
0
0
0
Consolidated in
Departmental Group
accounts (excluding nuclear
site licence companies)
Advisory, Conciliation and
Arbitration Service
12
0
12
0
0
0
British Business Bank plc
18
1
17
0
0
0
Civil Nuclear Police Authority
5
0
5
0
5
0
Coal Authority
12
0
12
0
0
0
Diamond Light Source Ltd
4
0
4
0
4
0
Low Carbon Contracts
Company Ltd
6
4
2
0
0
0
Nuclear
Decommissioning Authority
16
4
12
0
14
1
LRadioactive Waste
Management Ltd
10
3
7
7
0
0
LNDA Archives Ltd
1
1
0
0
0
0
Oil and Gas Authority
4
0
4
0
0
0
UK Research and Innovation
23
12
11
0
0
0
UK Shared Business
Services Ltd
23
0
23
0
16
0
UK Atomic Energy Authority
30
29
1
0
1
0
Not consolidated in
the Departmental
Group accounts
British Hallmarking Council
2
1
1
0
1
1
Total
255
71
184
7
51
12

Annual report and accounts 2018-19
76
Table 3a: Off-payroll engagements of board members, and/or, senior officials with
significant financial responsibility, between 1 April 2018 and 31 March 2019
Number of off-payroll
engagements or board
members, and/or senior
officials with significant
financial responsibility
Total number of individuals
on payroll and off-payroll
that have been deemed
board members, and/
or others with significant
financial responsibility
Core Department and agencies
Core Department
0
29
Insolvency Service
0
10
UK Space Agency
0
8
Consolidated in Departmental Group accounts
(excluding nuclear site licence companies)
Advisory, Conciliation and Arbitration Service
0
5
British Business Bank plc
0
7
LBBB Patient Capital Holdings Ltd
0
1
LBritish Business Investments Ltd
0
2
LBritish Business Finance Ltd
0
7
LBritish Business Financial Services Ltd
0
7
LBritish Patient Capital Limited
0
1
LCapital for Enterprise Fund Managers Ltd
0
2
Civil Nuclear Police Authority
0
4
Coal Authority
0
12
Competition Appeal Tribunal and Competition Service
2
6
Cornwall and Isles of Scilly Investments Ltd
0
1
Diamond Light Source Ltd
0
6
The Financial Reporting Council Ltd
0
2
Low Carbon Contracts Company Ltd
0
12
Midlands Engine Investments Ltd
0
1
Northern Powerhouse Investments Ltd
0
1
Nuclear Decommissioning Authority
0
18
LRadioactive Waste Management Ltd
0
7
Oil and Gas Authority
0
1
South Tees Site Company Ltd
0
2
UK Research and Innovation
3
13
UK Shared Business Services Ltd
0
2
UK Atomic Energy Authority
1
17
LAEA Insurance Ltd
3
3
Not consolidated in the Departmental Group accounts
British Hallmarking Council
1
1
Committee on Climate Change1
0
14
Groceries Code Adjudicator
1
1
Pubs Code Adjudicator
0
2
Small Business Commissioner
2
3
Total
13
208

Accountability report
77
Notes to table 3a: off-payroll engagements of board members
The notes below relate to the senior off-payroll engagements in table 3a. It includes details of the
exceptional circumstances that led to each off-payroll engagement and the length of time each
engagement lasted.
Organisation
Duration and reason for senior off-payroll appointment
Competition Appeal Tribunal and
Competition Service

From 2013
The President has a statutory duty to provide training to members of the
Tribunal, and the off-payroll member was appointed as a training provider on
his behalf. He was appointed in 2013, and the contract was renewed in 2015
and 2017. He has been a member of the Tribunal since its inception in 2000
and has knowledge of its processes and case histories and is a fellow of the
Higher Education Academy among other qualifications. The President and the
Registrar of the Tribunal view it as very important that he continues to develop
and deliver training, and provide support with other engagements.
From January 2019
Additional off payroll member appointed in January 2019 for the Training
Committee.
UK Atomic Energy Authority
For March 2019
Short-term engagement of a retiring board member at the end of their tenure
to cover the period until the appointment of a replacement.
AEA Insurance Ltd (AEAIL)
From 2002 and 2005 respectively
AEAIL is a captive insurance company registered in the Isle of Man and subject
to their tax and NI legislation. AEAIL does not employ anyone. Two AEAIL
directors are off-payroll by default and are paid a small fee by AEAIL.
From 2014 to 2019
The third off-payroll director is a director of UKAEA and on UKAEA payroll.
Groceries Code Adjudicator
Appointed in June 2013
The Adjudicator
British Hallmarking Council (BHC)
From 1 April to 5 April 2018
Since 2017, the Chair had been paid under off-payroll arrangements as they
were self employed. In 2018, advice was taken by the BHC; it was concluded
that the role is deemed to be a statutory office holder, employers national
insurance was payable, and a payroll needed. This was put into operation in
2018, and backdated to 6 April 2018.
Small Business
Commissioner (SBC)
From 7 January 2019 to present
The SBC has two non-executive directors on their Advisory Board and Audit,
Risk & Assurance Board. These members have a contract to work with the
SBC for four years.

Annual report and accounts 2018-19
78
Nuclear site licence companies: off-payroll engagements
The nuclear site licence companies deliver work for the Nuclear Decommissioning Authority (NDA).
These companies are included within the departmental accounting boundary; however, they operate
with a high degree of autonomy. Although they have a higher number of off-payroll engagements,
off-payroll workers represent a small proportion of the overall workforce. There is a need to bring
in unique skills and experience which cannot be found in house due to the specialised and project
driven nature of their work.
Table 1b: Off-payroll engagements as of 31 March 2019, for more than £245 per day and
that last longer than 6 months
At time of reporting, number that have existed for:
Total number
Less
than 1
year
1 to 2
years
2 to 3
years
3 to 4
years
4 years
or more
Nuclear site licence companies
Dounreay Site Restoration Ltd
41
9
4
4
10
14
LLW Repository Ltd
48
16
9
10
8
5
Magnox Ltd
166
16
54
28
4
64
Sellafield Ltd
321
178
32
15
24
72
Total
576
219
99
57
46
155
Table 2b: New off-payroll engagements, or those that reached 6 months in duration,
between 1 April 2018 and 31 March 2019, for more than £245 per day and that last longer
than 6 months
Total number
Number assessed as
caught by IR35
Number assessed as
not caught by IR35
Number engaged
directly (via PSC
contracted to BEIS)
and are on the BEIS
payroll
No. of engagements
reassessed for
consistency/
assurance purposes
during the year
No. of engagements
that saw a change to
IR35 status following
the consistency
review
Nuclear site
licence companies
Dounreay Site
Restoration Ltd
10
0
0
0
0
0
LLW Repository Ltd
53
0
53
0
0
0
Magnox Ltd
61
n/a
n/a
n/a
n/a
n/a
Sellafield Ltd
59
23
27
3
0
0
Total
183
23
80
3
0
0

Accountability report
79
Table 3b: Off-payroll engagements of board members, and/or, senior officials with
significant financial responsibility, between 1 April 2018 and 31 March 2019
Number of off-payroll
engagements of board members,
and/or senior officials with
significant financial responsibility
Total number of individuals on payroll
and off-payroll that have been deemed
‘board members, and/or others with
significant financial responsibility’
during the financial year
Nuclear site licence companies
Dounreay Site Restoration Ltd
8
9
LLW Repository Ltd
2
10
Magnox Ltd
2
2
Sellafield Ltd
0
1
Total
12
22
Notes to table 3b: off-payroll engagements of board members
The notes below relate to the senior off-payroll engagements in table 3b. It includes details of the
exceptional circumstances that led to each off-payroll engagement and the length of time each
engagement lasted.
Organisation
Duration and reason for senior off-payroll appointment
Dounreay Site
Restoration Ltd
i) From 1 Apr 2013 to 22 May 2018, ii) From 30 Sep 2015 to 31 Mar 2019, iii) From 19 Feb
2016 to 31 Mar 2019, iv) From 1 Dec 2015 to date, v) and vi)
From 1 Dec 2016 to date, vii) From 16 May 2017 to date, viii) From 16 Nov 2018 to date
The eight off-payroll board members are employed by the Parent Body Organisation (PBO),
Cavendish Dounreay Partnership Ltd, thus they are not on Dounreay’s payroll. Dounreay pay
the PBO for their services.
LLW Repository Ltd
From 30 Sept 2011
Post holder supplied by the parent body organisation as required by contractual
arrangements with NDA.
From 1 Dec 2015
Post holder supplied by the parent body organisation as required by contractual
arrangements with NDA.
Magnox Ltd
From 13 Nov 2017 and 24 Oct 2017 respectively
The Finance Director and Managing Director are seconded from the parent organisation,
Cavendish Fluor Ltd; as such they are not on Magnox’s payroll. This arrangement will cease
when Magnox becomes a subsidiary of the NDA on 1 Sept 19.
Consultancy expenditure
The Departmental Group’s expenditure on consultancy in 2018-19 was £61.9 million (2017-18:
£63.0 million), of which £30.8 million (2017-18: £41.4 million) was related to Site Licence Companies.
Consultants are hired to work on projects in a number of specific situations: where the department
does not have the skills set required; where the particular requirement falls outside the core business
of civil servants; or where an external, independent perspective is required. When used appropriately,
consultancy can be a cost effective and efficient way of getting the temporary and skilled external
input that the department needs. We are committed to the consistent application of the Cabinet
Office’s 2010 controls on consultancy and other spending.

Annual report and accounts 2018-19
80
Remuneration report
Remuneration policy
Service contracts
The Constitutional Reform and Governance Act 2010 requires Civil Service appointments to be made
on merit on the basis of fair and open competition. The Recruitment Principles published by the Civil
Service Commission specify the circumstances when appointments may be made otherwise. Unless
otherwise stated below, the officials covered by this report hold appointments which are open-ended.
Early termination, other than for misconduct, would result in the individual receiving compensation
as set out in the Civil Service Compensation Scheme. Further information about the work of the Civil
Service Commissioners can be found at http://www.civilservicecommission.org.uk.
Ministers
Remuneration of ministers is determined in accordance with the provisions of the Ministerial and other
Salaries Act 1975 (as amended by The Ministerial and other Salaries Order 1996) and the Ministerial
and other Pensions and Salaries Act 1991.
Senior civil servants
The Senior Salaries Review Body provides independent advice to the Prime Minister on the
remuneration of senior civil servants. The review body considers economic considerations such as
local variations in labour markets and funds available to departments. Further information about the
work of the review body can be found at https://www.gov.uk/government/organisations/review-body-
on-senior-salaries.

Accountability report
81
Ministers: salary and pension entitlements
audited information
Salary and pension entitlements of ministers of the department for the year ending 31 March 2019 are
set out in the tables below.
Ministers single total figure of remuneration
Salary (£)
Pension benefits
(to nearest £1,000)1
Total
(to nearest £1,000)
Ministers
2018-19
2017-18
2018-19
2017-18
2018-19
2017-18
Secretary of State
Rt Hon Greg Clark MP
67,505
67,505
17,000
16,000
84,000
84,000
Ministers of State
Rt Hon Claire Perry MP (from
12 June 2017)2
31,680
25,432
7,000
7,000
39,000
32,000
Chris Skidmore MP (from
5 December 2018)3
10,219
-
3,000
-
13,000
-
Sam Gyimah MP (from
10 January 2018 to
30 November 2018)4
29,040
5,830
5,000
2,000
34,000
8,000
Parliamentary Under-
Secretaries of State
Rt Hon Lord Henley (from
27 October 2017)5
105,076
45,194
17,000
7,000
122,000
52,000
Kelly Tolhurst MP (from 19
July 2018)6
15,072
-
4,000
-
19,000
-
Richard Harrington MP (from
14 June 2017 to 25 March 2019)7
27,608
16,781
6,000
5,000
33,000
22,000
Andrew Griffiths MP (from
10 January 2018 to 14 July 2018)8
12,030
3,993
1,000
1,000
13,000
5,000
Notes
Where ministers have moved to or from another department during the year, details of any remuneration relating to their
subsequent or prior roles will be in that department’s remuneration report. Ministers who transfer from another department
continue being paid at the appropriate rate of pay with effect from the first day of the month following the date of
appointment. Former ministers who transfer to other departments are paid at their current rate of pay up to the end of the
month. Any increase in ministers’ salaries on transfer from the date of appointment is paid by their new department.
Salary information above excludes employers’ national insurance contributions. None of the ministers of the department
received any benefits-in-kind during the year.
1. The value of pension benefits accrued during the year is calculated as (real increase in pension multiplied by 20) less
(contributions made by the individual). Real increase excludes increases due to inflation or any increase or decrease due
to transfer of pension rights.
2. Full year equivalent salary for 2017-18 is £31,680.
3. Full year equivalent salary for 2018-19 is £31,680; joint Minister of State at Department for Education but paid by
Department for Business, Energy and Industrial Strategy.
4. Full year equivalent salary for 2018-19 is £31,680 (2017-18: £31,680); salary for 2018-19 includes £7,920 statutory
payment on cessation of Ministerial office; joint Minister of State at Department for Education but paid by Department for
Business, Energy and Industrial Strategy.
5. Full year equivalent salary for 2017-18 is £105,076; salary includes Lords Office Holders’ Allowance of £36,366.
6. Full year equivalent salary for 2018-19 is £22,375; formerly Assistant Government Whip paid by HM Treasury.
7. Full year equivalent salary for 2018-19 is £22,375 (2017-18: £22,375); salary for 2018-19 includes £5,594 statutory
payment on cessation of Ministerial office.
8. Full year equivalent salary for 2018-19 is £22,375 (2017-18: £22,375); salary for 2018-19 includes £5,594 statutory
payment on cessation of Ministerial office.

Annual report and accounts 2018-19
82
Ministers: pension benefits
Ministers
pension
benefits at age
65 at 31 March
2019
Real
increase in
pension at
age 65
CETV at
31 March
20191
CETV at
31 March
2018
restated1
Real
increase in
CETV
Ministers
£’000
£’000
£’000
£’000
£’000
Secretary of State
Rt Hon Greg Clark MP2
10-15
0-2.5
142
121
8
Ministers of State
Rt Hon Claire Perry MP (from 12
June 2017)2
0-5
0-2.5
42
33
4
Chris Skidmore MP (from 5
December 2018)
0-5
0-2.5
7
6
1
Sam Gyimah MP (from 10 January 2018
to 30 November 2018)2
0-5
0-2.5
28
23
2
Parliamentary Under-
Secretaries of State
Rt Hon Lord Henley (from 27
October 2017)
0-5
0-2.5
45
21
16
Kelly Tolhurst MP (from 19 July 2018)
0-5
0-2.5
5
2
1
Richard Harrington MP (from 14 June
2017 to 25 March 2019)2
0-5
0-2.5
26
18
5
Andrew Griffiths MP (from 10 January
2018 to 14 July 2018)2
0-5
0-2.5
5
4
1
1. Where ministers joined or left during the course of the year, their CETV opening or closing amounts will be as at their
joining or leaving dates. See notes to Remuneration report for explanation of CETV.
2. Due to a change in calculation factors by the Government Actuary, opening CETV amounts have been restated.

Accountability report
83
Senior managers: salary and pension entitlements
audited information
Salary and pension entitlements of senior managers of the Core Department are set out in the
tables below which comprise all those who were members of the Departmental Board or Executive
Committee during 2018-19.
Senior managers single total figure of remuneration
Officials
Salary (£’000)1
Bonus payments
(£’000)
Pension benefits
(to nearest £1,000)2
Total
(£’000)
2018-19
2017-18
2018-19
2017-18
2018-19
2017-18
2018-19
2017-18
Alex Chisholm
180-185
180-185
5-10
-
70,000
69,000
255-260
245-250
Sam Beckett
125-130
125-130
10-15
10-15
38,000
32,000
175-180
165-170
Nick Chism (from
1 June 2018)3
115-120
-
-
-
46,000
-
160-165
-
Julian Critchlow (from
14 May 2018)4
120-125
-
-
-
-
-
120-125
-
Gareth Davies
130-135
125-130
10-15
10-15
49,000
38,000
190-195
175-180
Sarah Harrison (from
28 February 2018)5
140-145
10-15
-
-
71,000
3,000
210-215
10-15
Jeremy Pocklington
(to 27 August 2018)6
45-50
120-125
-
10-15
17,000
43,000
65-70
170-175
Jaee Samant7
125-130
125-130
-
-
99,000
160,000
220-225
285-290
Helen Shirley-Quirk
(from 29 August 2018
to 7 October 2018)8
10-15
-
-
-
4,000
-
10-15
-
Joanna
Whittington (from
8 October 2018)9
75-80
-
-
-
23,000
-
95-100
-
John Loughhead
130-135
130-135
-
-
62,000
57,000
190-195
185-190
Caleb Deeks (from
23 May 2017)10
100-105
75-80
0-5
-
61,000
68,000
165-170
140-145
Tom Taylor (from
15 January 2018)11
125-130
25-30
5-10
-
47,000
7,000
180-185
30-35
Doug Watkins (from
1 September 2018)12
70-75
-
10-15
-
57,000
-
135-140
-
1 Salary information excludes employers’ national insurance
contributions. No senior managers received any benefits-
in-kind during the year or compensation for loss of office.
Where managers have moved to or from a similar senior
role in another department during the year, details of any
remuneration relating to their subsequent or prior roles
will be in that department’s remuneration report.
2 The value of pension benefits accrued during the year is
calculated as (real increase in pension multiplied by 20)
plus (real increase in any lump sum) less (contributions
made by the individual). Real increase excludes increases
due to inflation or any increase or decrease due to
transfer of pension rights.
3 Full year equivalent salary for 2018-19 is 140-145.
4 Full year equivalent salary for 2018-19 is 140-145.
5 Full year equivalent salary for 2017-18 is 140-145.
6 Full year equivalent salary for 2018-19 is 120-125;
transferred on 27 August to Ministry of Housing,
Communities and Local Government.
7 Full year equivalent salary for 2017-18 is 120-125; amount
paid in 2017-18 includes pay adjustment relating to 2016-17.
8 Full year equivalent salary for 2018-19 is 95-100.
9 Full year equivalent salary for 2018-19 is 155-160.
10 Full year equivalent salary for 2017-18 is 85-90.
11 Full year equivalent salary for 2017-18 is 120-125.
12 Full year equivalent salary for 2018-19 is 120-125.

Annual report and accounts 2018-19
84
Senior managers pension benefits
Officials
Accrued
pension at
pension
age as at 31
March 2019
and related
lump sum
Real increase
in pension
and related
lump sum at
pension age
CETV at 31
March 20191
CETV at 31
March 20181
Real
increase in
CETV
Employer
contribution
to
partnership
pension
account
£’000
£’000
£’000
£’000
£’000
Nearest
£100
Alex Chisholm
25-30
2.5-5
332
246
37
-
Sam Beckett2
50-55 plus
lump sum
of 115-120
0-2.5 plus
lump sum
of (2.5-0)
947
822
17
-
Nick Chism (from 1
June 2018)
0-5
2.5-5
32
-
24
-
Julian Critchlow (from
14 May 2018)3
-
-
-
-
-
-
Gareth Davies
40-45
2.5-5
614
504
22
-
Sarah Harrison (from
28 February 2018)
50-55
2.5-5
914
773
47
-
Jeremy Pocklington
(to 27 August 2018)4
40-45
plus lump
sum of 20-25
0-2.5 plus
lump sum
of (2.5-0)
551
536
6
-
Jaee Samant
45-50 plus
lump sum
of 110-115
5-7.5 plus
lump
sum of 5-7.5
886
719
71
-
Helen Shirley-Quirk
(from 29 August 2018
to 7 October 2018)
35-40
plus lump
sum of 90-95
0-2.5 plus
lump sum
of (2.5-0)
743
739
2
-
Joanna Whittington
(from 8 October 2018)
35-40
plus lump
sum of 70-75
0-2.5 plus
lump sum
of (2.5-0)
674
594
10
-
John Loughhead
10-15
2.5-5
224
169
45
-
Caleb Deeks (from
23 May 2017)
25-30
2.5-5
319
239
27
-
Tom Taylor (from 15
January 2018)
40-45
plus lump
sum of 95-100
2.5-5 plus
lump sum
of (2.5-0)
720
605
22
-
Doug Watkins (from 1
September 2018)
55-60 plus
lump sum
of 150-155
2.5-5
plus lump
sum of 2.5-5
1,139
1,018
42
-
1 Where senior managers joined or left during the course of the year, their CETV opening or closing amounts will be as at
their joining or leaving dates. See Notes to Remuneration report for explanation of CETV.
2 CETV as at 31 March 2018 increased from 818 as disclosed in 2017-18 report to 822 as result of retrospective change to
service history.
3 Not a member of Civil Service pension arrangements for reporting year.

Accountability report
85
Notes to the Remuneration
report
The information in this report relates only to the
core Department. Similar information relating to
chief executives and most senior managers of
the executive agencies and other bodies of the
departmental family is given in the separate annual
reports and accounts of the relevant bodies.
Salary
‘Salary’ includes gross salary; overtime;
reserved rights to London weighting or
London allowances; recruitment and retention
allowances; private office allowances and any
other allowance to the extent that it is subject
to UK taxation. This report is based on accrued
payments made by the core Department and
thus recorded in these accounts. In respect
of ministers in the House of Commons,
departments bear only the cost of the additional
ministerial remuneration; the salary for their
services as an MP (£77,379 from 1 April 2018)
and various allowances to which they are entitled
are borne centrally. However, the arrangement
for ministers in the House of Lords is different
in that they do not receive a salary but rather
an additional remuneration which cannot be
quantified separately from their ministerial
salaries. This total remuneration, as well as the
allowances to which they are entitled, is paid by
the core Department and is therefore shown in
full in the figures.
Bonuses
Bonuses are based on performance levels
attained and are made as part of the appraisal
process. Bonuses relate to the performance
in the year in which they become payable to
the individual. The bonuses reported in 2018-
19 relate to performance in 2017-18 and the
comparative bonuses reported for 2017-18 relate
to performance in 2016-17.
Ministerial pensions
Pension benefits for ministers are provided by
the Parliamentary Contributory Pension Fund
(PCPF). The scheme is made under statute and
the rules are set out in the Ministers’ etc Pension
Scheme 2015, available at http://qna.files.
parliament.uk/ws-attachments/170890/original/
PCPF%20MINISTERIAL%20SCHEME%20
FINAL%20RULES.doc. Those ministers who
are Members of Parliament may also accrue an
MP’s pension under the PCPF, details of which
are not included in this report. A new MP’s
pension scheme was introduced from May 2015
although members who were MPs and aged
55 or older on 1 April 2013 have transitional
protection to remain in the previous MP’s final
salary pension scheme. Benefits for ministers are
payable from State Pension age under the 2015
scheme. Pensions are re-valued annually in line
with Pensions Increase legislation both before
and after retirement. The contribution rate from
May 2015 is 11.1% and the accrual rate is 1.775%
of pensionable earnings. The figure shown for
pension value includes the total pension payable
to the member under both the pre- and post-
2015 ministerial pension schemes.
Ministerial pensions: Cash Equivalent Transfer Value
The Cash Equivalent Transfer Value (CETV) is
the actuarially assessed capitalised value of the
pension scheme benefits 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 benefits in another pension scheme or
arrangement when the member leaves a scheme
and chooses to transfer the pension benefits
they have accrued in their former scheme. The
pension figures shown relate to the benefits that
the individual has accrued as a consequence
of their total ministerial service, not just their
current appointment as a minister. CETVs are
calculated in accordance with The Occupational
Pension Schemes (Transfer Values) (Amendment)
Regulations 2008 and do not take account of any
actual or potential reduction to benefits resulting
from Lifetime Allowance Tax which may be due
when pension benefits are taken.
Ministerial pensions: Real increase in the value
of the CETV
This is the element of the increase in accrued
pension funded by the Exchequer. It excludes
increases due to inflation and contributions paid
by the minister. It is worked out using common
market valuation factors for the start and end of
the period.

Annual report and accounts 2018-19
86
Civil Service pensions
Pension benefits are provided through the Civil
Service pension arrangements. From 1 April
2015 a new pension scheme for civil servants
was introduced – the Civil Servants and Others
Pension Scheme or alpha, which provides
benefits on a career average basis with a normal
pension age equal to the member’s State
Pension Age (or 65 if higher). From that date all
newly appointed civil servants and the majority
of those already in service joined alpha. Prior
to that date, civil servants participated in the
Principal Civil Service Pension Scheme (PCSPS).
The PCSPS has four sections: three providing
benefits on a final salary basis (classic, premium
or classic plus) with a normal pension age of 60;
and one providing benefits on a whole career
basis (nuvos) with a normal pension age of 65.
These statutory arrangements are unfunded
with the cost of benefits met by monies voted
by Parliament each year. Pensions payable
under classic, premium, classic plus, nuvos
and alpha are increased annually in line with
Pensions Increase legislation. Existing members
of the PCSPS who were within 10 years of their
normal pension age on 1 April 2012 remained in
the PCSPS after 1 April 2015. Those who were
between 10 years and 13 years and 5 months
from their normal pension age on 1 April 2012
will switch into alpha sometime between 1
June 2015 and 1 February 2022. All members
who switch to alpha have their PCSPS benefits
‘banked’, with those with earlier benefits in one
of the final salary sections of the PCSPS having
those benefits based on their final salary when
they leave alpha. (The pension figures quoted for
officials show pension earned in PCSPS or alpha
– as appropriate. Where the official has benefits
in both the PCSPS and alpha the figure quoted
is the combined value of their benefits in the two
schemes.) Members joining from October 2002
may opt for either the appropriate defined benefit
arrangement or a ‘money purchase’ stakeholder
pension with an employer contribution
(partnership pension account).
Employee contributions are salary-related and
range between 4.6% and 8.05% for members
of classic, premium, classic plus, nuvos and
alpha. Benefits in classic accrue at the rate of
1/80th of final pensionable earnings for each year
of service. In addition, a lump sum equivalent
to three years’ initial pension is payable on
retirement. For premium, benefits accrue at the
rate of 1/60th of final pensionable earnings for
each year of service. Unlike classic, there is no
automatic lump sum. classic plus is essentially a
hybrid with benefits for service before 1 October
2002 calculated broadly as per classic and
benefits for service from October 2002 worked
out as in premium. In nuvos a member builds up
a pension based on his pensionable earnings
during their period of scheme membership.
At the end of the scheme year (31 March) the
member’s earned pension account is credited
with 2.3% of their pensionable earnings in
that scheme year and the accrued pension is
uprated in line with Pensions Increase legislation.
Benefits in alpha build up in a similar way to
nuvos, except that the accrual rate in 2.32%. In
all cases members may opt to give up (commute)
pension for a lump sum up to the limits set by the
Finance Act 2004.
The partnership pension account is a stakeholder
pension arrangement. The employer makes a
basic contribution of between 8% and 14.75%
(depending on the age of the member) into
a stakeholder pension product chosen by
the employee from a panel of providers. The
employee does not have to contribute, but where
they do make contributions, the employer will
match these up to a limit of 3% of pensionable
salary (in addition to the employer’s basic
contribution). Employers also contribute a further
0.5% of pensionable salary to cover the cost of
centrally provided risk benefit cover (death in
service and ill health retirement).
The accrued pension quoted is the pension the
member is entitled to receive when they reach
pension age, or immediately on ceasing to be an
active member of the scheme if they are already
at or over pension age. Pension age is 60 for
members of classic, premium and classic plus,
65 for members of nuvos, and the higher of 65
or State Pension Age for members of alpha. (The
pension figures quoted for officials show pension
earned in PCSPS or alpha – as appropriate.
Where the official has benefits in both the PCSPS
and alpha the figure quoted is the combined
value of their benefits in the two schemes but

Accountability report
87
note that part of that pension may be payable
from different ages.)
Further details about the Civil Service pension
arrangements can be found at the website
https://www.civilservicepensionscheme.org.uk/.
Civil Service pensions: Cash Equivalent
Transfer Value
The CETV is the actuarially assessed capitalised
value of the pension scheme benefits 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 benefits in another pension
scheme or arrangement when the member
leaves a scheme and chooses to transfer the
benefits accrued in their 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 figures include the value of any pension
benefit in another scheme or arrangement
which the member has transferred to the Civil
Service pension arrangements. They also include
any additional pension benefit accrued to the
member as a result of their buying additional
pension benefits at their own cost. CETVs are
worked out in accordance with The Occupational
Pension Schemes (Transfer Values) (Amendment)
Regulations 2008 and do not take account of any
actual or potential reduction to benefits resulting
from Lifetime Allowance Tax which may be due
when pension benefits are taken.
Civil Service pensions: Real increase in CETV
This reflects the increase in CETV that is funded
by the employer. It does not include 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.
Fair pay disclosures
audited information
Reporting bodies are required to disclose the
relationship between the remuneration of the
highest-paid director in their organisation and
the median remuneration of the organisation’s
workforce.
The banded remuneration of the highest paid
director in BEIS in the financial year 2018-19,
including extrapolation to the full year of any pay
increases during the year plus any bonuses,
was £185,000 to £190,000 (2017-18: £180,000
to £185,000). This was 4.81 times (2017-18: 4.91)
the median remuneration of the workforce, which
was £38,971 (2017-18: £37,200).
In 2018-19 one person (2017-18: one) received
remuneration in excess of the highest paid
director. Remuneration ranged from £18,200 to
£194,747 (2017-18: £18,200 to £204,992).
Total remuneration includes salary, non-
consolidated performance-related pay and
benefits-in-kind. It does not include severance
payments, employer pension contributions and
the cash equivalent transfer value of pensions.

Annual report and accounts 2018-19
88
Fee entitlements for non-executive board members
audited information
The table below shows the fee entitlements for non-executive directors who were members of the
Departmental Board in 2018-19.
Non-executive
member
Fee entitlement
for 2018-19
Fee entitlement
for 2017-18
£000
£000
Archie Norman
20-25
20-25
Professor Dame
Ann Dowling (until
31 May 2018)1
5-10
20-25
Dame
Carolyn McCall
15-20
15-20
Charles Randell
(until 30
June 2018)2
5-10
20-25
Kathryn Parsons
15-20
15-20
Leena Nair (from
25 June 2018)3
15-20
-
Nigel Boardman
(from 25
June 2018)4
15-20
-
Stephen Carter5
15-20
15-20
Stuart
Quickenden5
15-20
15-20
1 Full year equivalent fee entitlement for 2018-19 is 20-25.
2 Full year equivalent fee entitlement for 2018-19 is 20-25; fee entitlement waived.
3 Full year equivalent fee entitlement for 2018-19 is 20-25.
4 Full year equivalent fee entitlement for 2018-19 is 20-25.
5 Fee entitlement waived.

Accountability report
89
Statement of Parliamentary Supply
Statement of Parliamentary Supply
audited information
In addition to the primary statements prepared under IFRS, the Government Financial Reporting Manual (FReM) requires BEIS to prepare
a Statement of Parliamentary Supply (SoPS) and supporting notes. They show resource and capital outturn against the Supply Estimate
presented to Parliament, in respect of each budgetary control limit.
Summary of resource and capital outturn 2018-19
2018-19
2017-18
restated
Estimate
Outturn
Voted outturn
compared
with Estimate:
saving/
(excess)
Outturn
SoPS
note
Voted
Non-Voted
Total
Voted
Non-Voted
Total
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Departmental
Expenditure Limit
- Resource
1.1
2,966,688
(1,532,275)
1,434,413
2,702,137
(1,455,648)
1,246,489
264,551
1,714,006
- Capital
1.2
11,496,267
-
11,496,267
10,813,932
-
10,813,932
682,335
10,391,920
Annually Managed
Expenditure
- Resource
1.1
(90,019,664)
352,000
(89,667,664)
(106,184,219)
319,330
(105,864,889)
16,164,555
75,124,046
- Capital
1.2
187,481
(142,400)
45,081
(274,854)
(141,811)
(416,665)
462,335
(1,196,772)
Total Budget
(75,369,228)
(1,322,675)
(76,691,903)
(92,943,004)
(1,278,129)
(94,221,133)
17,573,776
86,033,200
Total
(75,369,228)
(1,322,675)
(76,691,903)
(92,943,004)
(1,278,129)
(94,221,133)
17,573,776
86,033,200
Total Resource
1.1
(87,052,976)
(1,180,275)
(88,233,251)
(103,482,082)
(1,136,318)
(104,618,400)
16,429,106
76,838,052
Total Capital
1.2
11,683,748
(142,400)
11,541,348
10,539,078
(141,811)
10,397,267
1,144,670
9,195,148
Total
(75,369,228)
(1,322,675)
(76,691,903)
(92,943,004)
(1,278,129)
(94,221,133)
17,573,776
86,033,200
Voted Budgets are those approved by Parliament through the Supply Estimates process. Non-voted Budgets generally comprise CFERs
(Consolidated Fund Extra Receipts) that represent operating income or expenditure financed directly from the Consolidated Fund as a
standing service or from the National Insurance Fund. Non-voted expenditure does not require additional Parliamentary authority, but is
included within Budgets set by HMT for completeness.

Annual report and accounts 2018-19
90
Net cash requirement 2018-19
2018-19
2017-18
restated
SoPS Note
Estimate
Outturn
Voted outturn
compared with
Estimate: saving
/ (excess)
Outturn
£’000
£’000
£’000
£’000
Net cash requirement
3
16,406,161
13,787,150
2,619,011
13,616,211
Administration costs 2018-19
2018-19
2017-18
restated
Estimate
Outturn
Voted outturn
compared with
Estimate: saving
/ (excess)
Outturn
£’000
£’000
£’000
£’000
Total administration costs
485,766
460,580
25,186
383,295
Figures in the areas outlined in bold are voted totals subject to Parliamentary control. In addition,
although not a separate voted limit, any breach of the administration budget will also result in an
excess vote.
Explanations of the significant variances between Estimate and outturn are given in the Financial
review on pages 36 to 44.
Prior year outturn is restated to reflect the changes as result of the Machinery of Government changes
- see note 27.
The notes on pages 91 to 99 form part of these accounts.

Accountability report
91
Notes to the Statement of Parliamentary Supply
SoPS 1.1. Analysis of net resource outturn by section
2018-19
2017-18
restated
Outturn
Estimate
Outturn
Administration
Programme
Gross
Income
Net
Gross
Income
Net
Total
Net Total
Net total
compared
with
Estimate
Net total
compared
with
Estimate,
adjusted
for
virements
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Spending in departmental expenditure limit (DEL) by section
Voted
A
Deliver an ambitious
industrial strategy
-
-
-
187,353
(5,067)
182,286
182,286
169,941
(12,345)
-
377,130
B
Maximise investment opportunities
and bolster UK interests
-
-
-
69,518
1,187
70,705
70,705
66,700
(4,005)
-
40,218
C
Promote competitive markets and
responsible business practices
798
-
798
110,537
(16,892)
93,645
94,443
103,780
9,337
9,337
86,230
D
Delivering affordable energy for
households and businesses
-
-
-
43,156
999
44,155
44,155
43,018
(1,137)
-
32,381
E
Ensuring that our energy system is
reliable and secure
-
-
-
12,084
(7,328)
4,756
4,756
11,485
6,729
6,729
4,201
F
Taking action on climate change
and decarbonisation
-
-
-
24,831
(2)
24,829
24,829
36,016
11,187
11,187
91,076
G
Managing our energy legacy safely
and responsibly
-
-
-
252,617
(747)
251,870
251,870
256,393
4,523
531
265,752
H
Science and Research
-
-
-
4,608
-
4,608
4,608
9,013
4,405
4,405
5,088
I
Capability
382,157
(31,991)
350,166
47,273
(3,591)
43,682
393,848
444,315
50,467
6,887
320,301
J
Government as Shareholder
3,890
(8)
3,882
184,383
(125,446)
58,937
62,819
118,625
55,806
52,819
112,900
K
Deliver an ambitious industrial
strategy (ALB) net
-
-
-
15,147
-
15,147
15,147
17,700
2,553
2,553
21,305

Annual report and accounts 2018-19
92
L
Promote competitive markets
and responsible business
practices (ALB) net
8,783
-
8,783
45,852
-
45,852
54,635
55,210
575
575
51,648
M
Ensuring that our energy system is
reliable and secure (ALB) net
-
-
-
(2,667)
-
(2,667)
(2,667)
1
2,668
1,698
(1,628)
N
Taking action on climate change
and decarbonisation (ALB) net
3,353
-
3,353
2,716
-
2,716
6,069
5,099
(970)
-
4,834
O
Managing our energy legacy safely
and responsibly (ALB) net
6,912
-
6,912
25,163
-
25,163
32,075
28,083
(3,992)
-
34,711
P
Science and Research (ALB) net
5,547
-
5,547
270,679
-
270,679
276,226
346,782
70,556
70,556
228,150
Q
Capability (ALB) net
30,475
-
30,475
-
-
-
30,475
4,382
(26,093)
-
33,635
R
Government as
Shareholder (ALB) net
52
-
52
(19,531)
-
(19,531)
(19,479)
(22,466)
(2,987)
-
(73,072)
S
NDA and SLC expenditure (ALB) net
50,612
-
50,612
1,124,725
-
1,124,725
1,175,337
1,272,611
97,274
97,274
1,254,752
Total resource DEL voted spend
492,579
(31,999)
460,580
2,398,444
(156,887)
2,241,557
2,702,137
2,966,688
264,551
264,551
2,889,612
Non-voted
T
Nuclear Decommissioning Authority
Income (CFER)
-
-
-
-
(978,373)
(978,373)
(978,373)
(1,055,000)
(76,627)
(76,627)
(1,176,795)
U
Nuclear Safeguards Development
-
-
-
(2,275)
-
(2,275)
(2,275)
(2,275)
-
-
1,189
V
Managing our energy legacy safely
and responsibly (CFER)
-
-
-
-
(475,000)
(475,000)
(475,000)
(475,000)
-
-
-
Total resource DEL non-voted spend
-
-
-
(2,275)
(1,453,373)
(1,455,648)
(1,455,648)
(1,532,275)
(76,627)
(76,627)
(1,175,606)
Total resource DEL spend
492,579
(31,999)
460,580
2,396,169
(1,610,260)
785,909
1,246,489
1,434,413
187,924
187,924
1,714,006
Spending in annually managed expenditure (AME) by section
Voted
W
Deliver an ambitious
industrial strategy
-
-
-
(283,976)
(28,623)
(312,599)
(312,599)
(64,270)
248,329
248,329
17,448
X
Maximise investment opportunities
and bolster UK interests
-
-
-
6,044
-
6,044
6,044
2,000
(4,044)
-
1,586
Y
Promote competitive markets and
responsible business practices
-
-
-
79,000
-
79,000
79,000
79,000
-
-
7,000
Z
Ensuring that our energy system is
reliable and secure
-
-
-
-
(295)
(295)
(295)
24,000
24,295
24,295
(415)
AA
Taking action on climate change
and decarbonisation
-
-
-
-
-
-
-
500
500
500
-
AB
Managing our energy legacy safely
and responsibly
-
-
-
(267,557)
(29,940)
(297,497)
(297,497)
(223,831)
73,666
73,666
(885,264)

Accountability report
93
AC
Science and Research
-
-
-
205,985
-
205,985
205,985
100,966
(105,019)
-
45,578
AD
Capability
-
-
-
(12,990)
-
(12,990)
(12,990)
8,344
21,334
21,277
13,557
AE
Government as Shareholder
-
-
-
7,558
(6,523)
1,035
1,035
33,775
32,740
28,696
(73,714)
AF
Renewable Heat Incentive
-
-
-
817,898
-
817,898
817,898
900,000
82,102
82,102
687,275
-
(21,100)
-
(21,100)
(21,100)
11,700
32,800
32,800
4,867
AH
Taking action on climate change
and decarbonisation (ALB) net
-
-
-
(2,971,284)
-
(2,971,284)
(2,971,284)
6,000,000
8,971,284
8,971,284
3,558,227
AI
Managing our energy legacy safely
and responsibly (ALB) net
-
-
-
(2,022,249)
-
(2,022,249)
(2,022,249)
1,950,631
3,972,880
3,839,410
1,507,140
AJ
Science and Research (ALB) net
-
-
-
41,299
-
41,299
41,299
12,848
(28,451)
-
94,631
AK
Capability (ALB) net
-
-
-
1
-
1
1
2
1
1
-
AL
Government as
Shareholder (ALB) net
-
-
-
93,768
-
93,768
93,768
94,671
903
903
(25,628)
AM
Nuclear Decommissioning Authority
-
-
-
(101,791,292)
-
(101,791,292)
(101,791,292)
(98,950,000)
2,841,292
2,841,292
69,911,856
Promote competitive markets
and responsible business
practices (ALB) net
-
-
-
57
-
57
57
-
(57)
-
87
Total resource AME voted spend
-
-
-
(106,118,838)
(65,381)
(106,184,219)
(106,184,219)
(90,019,664)
16,164,555
16,164,555
74,864,231
Non-voted
AN
Managing our energy legacy safely
and responsibly (CFER)
-
-
-
-
-
-
-
-
-
-
-
AO
Government as Shareholder
-
-
-
326,414
(7,084)
319,330
319,330
352,000
32,670
32,670
259,815
Total resource AME non-voted spend
-
-
-
326,414
(7,084)
319,330
319,330
352,000
32,670
32,670
259,815
Total resource AME spend
-
-
-
(105,792,424)
(72,465)
(105,864,889)
(105,864,889)
(89,667,664)
16,197,225
16,197,225
75,124,046
Total resource DEL and AME spend
492,579
(31,999)
460,580
(103,396,255)
(1,682,725)
(105,078,980)
(104,618,400)
(88,233,251)
16,385,149
76,838,052
Explanations of the significant variances between the Outturn and Estimate are included in the
Financial review on pages 36 to 44.

Annual report and accounts 2018-19
94
SoPS 1.2. Analysis of net capital outturn by section
2018-19
2017-18
restated
Outturn
Estimate
Outturn
Gross
Income
Net
Net
Net total
compared
with
Estimate
Net total
compared
with
Estimate,
adjusted
for
virements
Net
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Spending in Departmental
Expenditure Limit (DEL)
by section
Voted
A
Deliver an ambitious
industrial strategy
220,461
(275,067)
(54,606)
(59,258)
(4,652)
13,667
142,364
B
Maximise investment
opportunities and
bolster UK interests
243,957
-
243,957
244,059
102
102
289,791
C
Promote competitive
markets and
responsible
business practices
2,682
-
2,682
6,469
3,787
3,787
2,375
D
Delivering affordable
energy for households
and businesses
32,718
-
32,718
32,741
23
23
43,633
E
Ensuring that our
energy system is
reliable and secure
(626)
-
(626)
(606)
20
20
60
F
Taking action on
climate change and
decarbonisation
75,778
(2,657)
73,121
92,164
19,043
19,043
51,578
G
Managing our energy
legacy safely and
responsibly
4,572
(294)
4,278
7,309
3,031
3,031
7,944
H
Science and Research
628,196
(65,019)
563,177
674,599
111,422
52,831
2,634,812
I
Capability
30,335
(30)
30,305
(103,592)
(133,897)
-
18,777
J
Government as
Shareholder
233,876
(58,005)
175,871
335,238
159,367
65,742
38,701
K
Deliver an
ambitious industrial
strategy (ALB) net
-
-
-
-
-
-
957,626
L
Promote competitive
markets and
responsible business
practices (ALB) net
1,059
-
1,059
1,180
121
121
1,377
M
Ensuring that our
energy system
is reliable and
secure (ALB) net
-
-
-
-
-
-
-

Accountability report
95
N
Taking action on
climate change and
decarbonisation
(ALB) net
255
-
255
260
5
5
39
O
Managing our energy
legacy safely and
responsibly (ALB) net
9,503
-
9,503
10,799
1,296
1,296
13,559
P
Science and
Research (ALB) net
7,530,042
-
7,530,042
7,540,496
10,454
7,972
3,803,928
Q
Capability (ALB) net
2,482
-
2,482
-
(2,482)
-
43
R
Government as
Shareholder (ALB) net
197,015
-
197,015
696,409
499,394
499,394
334,300
S
NDA and SLC
expenditure
2,002,699
-
2,002,699
2,018,000
15,301
15,301
2,051,013
Total capital DEL
voted spend
11,215,004
(401,072)
10,813,932
11,496,267
682,335
682,335
10,391,920
Non-voted
T
Nuclear
Decommissioning
Authority
Income (CFER)
-
-
-
-
-
-
-
U
Nuclear Safeguards
Development
-
V
Managing our energy
legacy safely and
responsibly (CFER)
-
Total capital DEL non-
voted spend
-
-
-
-
-
-
-
Total capital DEL spend
11,215,004
(401,072)
10,813,932
11,496,267
682,335
682,335
10,391,920
Spending in Annually
Managed Expenditure
(AME) by section
Voted
W
Deliver an ambitious
industrial strategy
-
-
-
-
-
-
-
X
Maximise investment
opportunities and
bolster UK interests
-
-
-
-
-
-
-
Y
Promote competitive
markets and
responsible
business practices
-
-
-
-
-
-
-
Z
Ensuring that our
energy system is
reliable and secure
-
-
-
-
-
-
-
AA
Taking action on
climate change and
decarbonisation
-
-
-
-
-
-
-
AB
Managing our energy
legacy safely and
responsibly
35,412
-
35,412
29,941
(5,471)
-
611,792
AC
Science and Research
1,212
-
1,212
-
(1,212)
-
864
AD
Capability
-
-
-
-
-
-
-
AE
Government as
Shareholder
6,240,000
(6,360,000)
(120,000)
315,000
435,000
399,810
(1,909)

Annual report and accounts 2018-19
96
AF
Renewable
Heat Incentive
-
-
-
-
-
-
-
AG
Deliver an
ambitious industrial
strategy (ALB) net
(16,387)
-
(16,387)
(7,460)
8,927
8,927
(3,474)
AH
Promote competitive
markets and
responsible business
practices (ALB) net
-
-
-
-
-
-
-
AI
Managing our energy
legacy safely and
responsibly (ALB) net
-
-
-
-
-
-
-
AJ
Science and
Research (ALB) net
(59,692)
-
(59,692)
-
59,692
53,009
(63,845)
AK
Capability (ALB) net
-
-
-
-
-
-
-
AL
Government as
Shareholder (ALB) net
(115,399)
-
(115,399)
(150,000)
(34,601)
-
(119,122)
Total capital AME
voted spend
6,085,146
(6,360,000)
(274,854)
187,481
462,335
461,746
424,306
Non-voted
AN
Managing our energy
legacy safely and
responsibly (CFER)
-
(141,811)
(141,811)
(142,400)
(589)
-
-
AK
Government as
Shareholder
-
-
-
-
-
-
-
Government as
Shareholder (CFER)
-
-
-
-
-
-
(1,621,078)
Total capital AME non-
voted spend
-
(141,811)
(141,811)
(142,400)
(589)
-
(1,621,078)
Total capital AME spend
6,085,146
(6,501,811)
(416,665)
45,081
461,746
461,746
(1,196,772)
Total capital DEL
and AME spend
17,300,150
(6,902,883)
10,397,267
11,541,348
1,144,081
1,144,081
9,195,148
Explanations of the significant variances between the Outturn and Estimate are included in the
Financial review on pages 36 to 44.
The increase in spend in 2016-17 and 2017-18 against Science and Research Capital DEL and
decrease against Science and Research (ALB) Capital DEL reflects the reclassification of expenditure
for the Higher Education Funding Council for England (HEFCE) for Science and Research following the
Machinery of Government transfer of HEFCE to the Department for Education. With effect from 2018-
19 this expenditure falls under Research England as part of UKRI, under Science and Research (ALB).

Accountability report
97
SoPS 2: Reconciliation of net resource outturn to net operating expenditure
Note
2018-19
2017-18
restated
Outturn
Outturn
£’000
£’000
Total resource outturn in Statement of Parliamentary Supply
SoPS
1.1
(104,618,400)
76,838,052
Add:
NDA remedial decommissioning costs which are capital in
budgets but taken through the SoCNE
2,002,699
2,051,013
Capital Grants
1,507,472
1,351,725
Share of profit/loss of joint ventures and associates
(187,156)
(951)
Other non-budget
(43,793)
72,174
Share of minority interest
-
5,263
Research and Development costs
7,405,902
6,831,269
Less:
Non-budgetary income
-
(103,858)
Profit on disposal of shares
-
(190,915)
Non-budget, non voted items in respect of BIS
(Postal Services Act 2011) Company Limited and B
Company Limited
(42,930)
(74,305)
Expected return on pension scheme assets
(40,825)
(36,510)
Gains/(losses) on defined benefit scheme
-
(5,219)
NDA income scored in SOPS only
126,783
114,345
Capital Income in SOCNE
(54,521)
(10,765)
Research and Development income
(488,889)
(411,290)
Other:
Impact of intra group transactions
60,583
(26,135)
Other differences
12,814
6,313
Net Expenditure for the period in Consolidated
Statement of Comprehensive Net Expenditure
(94,360,261)
86,410,206
The prior year comparatives present the Net Operating Expenditure as reported at 31 March 2018.
This is restated following a Machinery of Government change – see note 27.

Annual report and accounts 2018-19
98
SoPS 3: Reconciliation of net resource outturn to net cash requirement
2018-19
Estimate
Outturn
Net total
Outturn
compared
with Estimate:
saving/(excess)
£’000
£’000
£’000
Resource Outturn
(88,233,251)
(104,618,400)
16,385,149
Capital Outturn
11,541,348
10,397,267
1,144,081
(76,691,903)
(94,221,133)
17,529,230
Accruals to cash adjustments:
Adjustments to remove non-cash items:
Depreciation
975
161,356
(160,381)
New provisions and adjustments to previous provisions
(133,466)
(10,253)
(123,213)
Other non-cash items
17,168
(29,165)
46,333
Adjustments for ALBs
Remove voted resource and capital
79,063,062
95,136,699
(16,073,637)
Add cash in grant-in-aid
11,593,405
10,978,148
615,257
Add share purchase and loans
217,886
(217,886)
Less share capital repayment
(23,861)
23,861
Adjustments to reflect movements in working balances:
Increase/(decrease) in receivables
920,059
(145,094)
1,065,153
(Increase)/decrease in payables
150,452
(150,452)
Use of provisions
314,186
283,348
30,838
Financial guarantees called in
10,637
(10,637)
Non-voted budget items:
Removal of non-voted budget items:
1,322,675
1,278,130
44,545
Net cash requirement
16,406,161
13,787,150
2,619,011

Accountability report
99
SoPS 4: Income payable to the Consolidated Fund
SoPS 4.1: Analysis of income payable to the Consolidated Fund
In addition to income retained, the following income was payable to the Consolidated Fund. Cash
receipts are shown in italics.
2018-19
2017-18
Outturn
Outturn
Income
Receipts
Income
Receipts
£’000
£’000
£’000
£’000
Operating income of the NDA
654,497
654,497
851,538
863,000
Other operating income
193,362
193,362
1,821,334
1,821,334
Income from coal pension surpluses
617,400
617,400
-
-
Total income payable to the
Consolidated Fund
1,465,259
1,465,259
2,672,872
2,684,334
In the prior year there was £1.62 billion paid over to the Consolidated Fund in respect of the sale of the
Green Investment Bank.
SoPS 4.2: Consolidated Fund income
Consolidated Fund income shown in SoPS note 4.1 above does not include any amounts collected
by the Department where it was acting as agent for the Consolidated Fund rather than as principal.
Full details of income collected as agent for the Consolidated Fund are in the department’s Trust
Statement published separately from but alongside these financial statements. Details are also
provided in the individual accounts of the Insolvency Service of items which are not included above.

Annual report and accounts 2018-19
100
Parliamentary accountability disclosures
Losses and special payments
audited information
The disclosures in this note are in accordance with Managing Public Money, the official guidance on
handling public funds.
Losses statement
2018-19
2017-18
Core and
agencies
Departmental
Group
Core and
agencies
Departmental
Group
Total number of losses
8,955
9,719
6,396
8,521
RPS receivable impairment (£m)
358
358
267
267
Other losses (£m)
27
28
15
19
Total value of losses (£m)
385
386
282
286
Details of cases over £300,000: claims abandoned: core Department
From 1 April 2018, the responsibility for Redundancy Payment Service (RPS) was transferred from the
core Department to the Insolvency Service (INSS).
Redundancy Payment Service (RPS) receivable impairment: most of the redundancy payments
made from the National Insurance Fund (NIF) are in respect of employees of insolvent companies.
Repayment of debt is recovered from the sale of the assets of the insolvent company. A small
proportion of the debt (12%) is preferential, and as such has a higher recovery rate. HMRC record
the impairment of the RPS receivable in NIF accounts. The RPS receivable impairment for 2018-19 is
£358 million (2017-18: £267 million).
Details of cases over £300,000: constructive losses: core Department
The core Department holds onerous leases for properties on the department’s estate for which
£113 million has been provided as at 31 March 2019 (31 March 2018: £126 million); payments in 2018-
19 totalled £26.6 million (2017-18: £15.2 million).
The core Department paid £0.7 million to a former supplier of shared central services (finance, human
resources etc) for early contract termination. The supplier had been contracted to supply these
services to a predecessor department (the former Department of Energy and Climate Change) but
supply has now been concentrated on a single provider.

Accountability report
101
Special payments
Special payments include extra-contractual, ex gratia, compensation and special severance payments.
2018-19
2017-18
Core and
agencies
Departmental
Group
Core and
agencies
Departmental
Group
Total number of special payments
6
13
17
21
Total value of special payments (£m)
-
2
60
60
Details of cases over £300,000
Special payments includes a fine of £380,000, associated costs of £96,753 and victim surcharge
of £170 paid by Sellafield Ltd for safety breaches relating to equipment used for the processing of
plutonium on 5 February 2017, following an investigation by the Office for Nuclear Regulation (ONR).
Special payments includes £1 million of interest on the corporation tax payment paid by UK Research
and Innovation (UKRI) to HMRC in March 2019 with regard to the chargeable gains that arose on
the transfer of assets from the legacy Councils into UKRI. Additional budget was received from HM
Treasury to cover this payment and it did not reduce the funding available for science in the year.
Gifts and hospitality
Managing Public Money states that annual reports should include a note on gifts made by
departments if their total value exceeds £300,000. Gifts with a value of more than £300,000 should
be noted individually. During 2018-19, the Department did not give, nor did it receive, any reportable
gifts above £300,000.
The core Department’s gifts and hospitality policy expects the highest level of standards of behaviour
from civil servants when deciding whether to accept or decline gifts and hospitality offered, as set
out within the Civil Service Code and Managing Public Money. There are also constraints in giving
hospitality to ensure that claims are proportionate, necessary, justifiable, modest, and defensible
under public scrutiny and delivering value for money from the use of public funds.
The policy applies to BEIS’s Civil Service staff, contractors, agents, and non-executive directors who
are bound by the Civil Service Code. This policy does not apply to Ministers and special advisers who
are covered under the Ministerial Code and Cabinet Office Code of Conduct for Special Advisers
respectively. Additionally, Special Advisors gifts and hospitality registers are published on a quarterly
basis, including nil returns.

Annual report and accounts 2018-19
102
Remote Contingent Liabilities
audited information
The Departmental Group has entered into the following contingent liabilities by offering guarantees,
indemnities or letters of comfort. None of these is a contingent liability within the meaning of IAS 37, as
the likelihood of a transfer of economic benefit in settlement is too remote. However, they are required
to be disclosed under the requirements of the Government Financial Reporting Manual and Managing
Public Money. Detail of quantifiable and unquantifiable remote contingent liabilities is presented in the
sections below.
Quantifiable
Measurement of quantifiable contingent liabilities is carried out following the requirements of IAS 37,
given that the reporting requirements of Managing Public Money. Managing Public Money requires
that the full potential costs of such contracts be reported to Parliament.
1 April
2018
Increase /
(Decrease)
in year
Liabilities
crystallised
in year
Obligations
expired in
year
31 March
2019
Amount
reported to
Parliament by
Departmental
Minute
£m
£m
£m
£m
£m
£m
The core Department has
indemnified Cornwall Council
for any liability relating to the
European Regional Development
Fund (ERDF) that might arise
from the transfer of Wave Hub
due to (a) any breach of the
ERDF Funding Agreements
which occurred on or before the
transfer date of 31 March 2017
and (b) any action or omission
by the core Department or Wave
Hub in relation to the ERDF
Funding Agreements prior to the
transfer which leads to finding of
an Irregularity by any competent
authority.
18
-
-
-
18
18
The core Department has
indemnified the Coal Authority
against potential claims arising
from remunerated advisory work
undertaken for other public sector
bodies where settlement exceeds
the Authority’s professional
indemnity insurance.
-
3
-
-
3
-
Total
18
3
-
-
21
18

Accountability report
103
Unquantifiable remote contingent liabilities:
core Department
Statutory guarantees
• Under section 9 of the British Aerospace Act
1980, the government is liable to discharge
any outstanding liability of BAE Systems plc
which vested in the company on 1 January
1981 in the event of its being wound up other
than for the purpose of reconstruction or
amalgamation.
Statutory indemnities
• Indemnities have been given to indemnify
UK Atomic Energy Authority to cover certain
indemnities provided by the Authority to
carriers and British Nuclear Fuels plc against
certain claims for damage caused by nuclear
matter in the course of carriage.
• Indemnities have been given to bankers of the
Insolvency Service against certain liabilities
arising in respect of non-transferable “account
payee” cheques due to insolvent estates and
paid into the Insolvency Service’s account.
• Indemnities have been given to the police at
the Police Information Technology Organisation
(Home Office) by the core Department and
Insolvency Service to cover any liabilities which
they might incur in providing the Criminal
Enforcement Team (formerly part of the core
Department) with access to data from the
Police National Computer.
• Indemnity has been given to National Grid’s
liabilities with regards to the interconnector
linking the UK and France.
Intellectual property
• A liability to the European Patent Office could
arise under Article 40 of the European Patent
Convention of 1973 as the UK is one of the
contracting states.
• A liability to the World Intellectual Property
Organisation could arise under Article 57 of the
Patent Cooperation Treaty as the UK is one of
the contracting states.
Data usage indemnities
• An indemnity has been provided to Pöyry
PLC relating to the use of their yield curve
data for the sale of Green Investment Bank.
The core Department has indemnified Pöyry
PLC for any liability that occurs as a result of
using their information in the sale process that
may be brought by bidders in relation to the
transaction.
Legal costs
• A contingent liability exists in relation to
ongoing legal cases. The cost is dependent on
the outcome of cases which currently cannot
be reliably estimated.
• Under an agreement with the Financial
Reporting Council (FRC), if the amount held in
their legal costs fund falls below £1 million in
any year, an additional grant will be made to
cover legal costs subsequently incurred in that
year.
Indemnities against personal liability
• Indemnities have been given to the directors
appointed by the core Department to wholly
owned subsidiaries. These indemnities are
against personal liability following any legal
action against the companies.
• Indemnities have been provided to directors
appointed to the Low Carbon Contracts
Company Limited and Electricity Settlements
Company Limited against personal liability
following any legal action against the
companies, to be triggered only after all other
means have been excluded i.e. company and
directors’ insurance (cover limit of £100 million)
and recovery of costs through their levies.
• Indemnities have been provided to the Low
Carbon Contracts Company Limited and
Electricity Settlements Company Limited in
respect of their officers, to be triggered only
after all other means have been excluded i.e.
company and directors’ insurance (cover limit
of £100 million) and recovery of costs through
their levies.
• Indemnities have been provided to trustees of
the Nuclear Liabilities Fund appointed by the
Secretary of State against personal liability in
the event of legal action against the Fund.

Annual report and accounts 2018-19
104
• Indemnities have been provided to trustees
of the Nuclear Liabilities Fund appointed
by British Energy (now EDF Energy) against
personal liability in the event of legal action
against the Fund, to be triggered only in the
event of failed recourse to indemnities from
EDF Energy.
• Indemnities have been provided to the
Official Receiver relating to their actions as
administrator of SSI Redcar with respect to
administration of the site.
• Indemnities have been provided to the Oil and
Gas Authority in respect of certain liabilities
that could arise from the actions or omissions
of its directors and otherwise arising from a
director holding or having held office in the
company.
• Indemnities have been provided to the MCS
Service Company Limited and trustees of the
MCS Charitable Foundation for any liability that
might arise as a result of actions taken and
decisions made for which the core Department
was ultimately responsible prior to transfer
to the Company and Charitable Foundation
of responsibility for the Microgeneration
Certification Scheme (MCS) in April 2018.
Insurance claims
• A statutory liability will arise in the event of
a nuclear accident in the UK for third-party
claims in excess of the operator’s liability.
• A contingent liability exists in relation to
Incidents/Accidents Insurance claims for
exposure to ionising radiation pursued outside
the existing UK Atomic Energy Authority
insurance scheme.
• The core Department has indemnified Elexon
Limited against third party claims relating
to the design and/or implementation of the
Contracts for Difference and Capacity Markets
settlement systems which are not covered
by insurance and/or guarantees by their
sub‑contractors.
Losses or damages under agreements
• An indemnity has been provided for any losses
or damages caused to other parties to the
Energy Research Partnership consortium
agreement.
Environmental clean-up
• A contingent liability exists in relation to the
costs of retrieving and disposing of sealed
radioactive sources in the event that a
company keeping such sources becomes
insolvent under the High Activity Sealed
Sources (HASS) Directive: Council Directive
2003/122/EURATOM.
• A contingent liability arises in relation to
the remediation of land contaminated by a
nuclear occurrence as the Secretary of State
is deemed to be the appropriate person to
bear responsibility under section 9 of The
Radioactive Contaminated Land (Modification
of Enactments) (England) (Amendment)
Regulations 2007 SI 2007/3245.
• A constructive obligation was created in 2002
when the government undertook to underwrite
the Nuclear Liabilities Fund in respect of
uncontracted and decommissioning liabilities
of British Energy (now EDF Energy Nuclear
Generation Limited) to the extent that the
assets of the Fund fall short. The undiscounted
estimated liability as at 31 March 2019 of £20.9
billion (31 March 2018: £20.5 billion) has a
present value of £22.3 billion (31 March 2018:
£57.8 billion) using the revised approach to
discounting at March 2019 described at note
1. The value of the Fund is £9.4 billion (31
March 2018: £9.3 billion) and is expected to
increase in the future from investment returns.
It is hard to quantify the extent to which the
net position of the Fund might represent
a contingent liability or contingent asset
given the high level of uncertainty relating to
estimation of cash outflows and investment
returns over a future period exceeding 100
years. The department does not consider it
to be either a contingent liability or contingent
asset as at 31 March 2019.
• Under the United Nations Convention on
the Law of the Sea (UNCLOS) 1982, OSPAR
decision 98/3, the Energy Act 2004 and the
Petroleum Act 1998, the department would
become responsible for decommissioning
most oil, gas and renewable energy
installations in the event that operators
are unable to fulfil their decommissioning
commitments.

Accountability report
105
EU Exit
• In July 2018, the UK Government announced
an extension of its guarantee of EU-funded
projects after the UK has left the EU. The
guarantee was originally announced in 2016.
The guarantee now covers the following:
a. The full Multiannual Financial Framework
allocation for structural and investment
funds over the 2014-20 funding period, with
payments to beneficiaries made up to the
end of 2023;
b. The payment of awards where UK
organisations successfully bid directly to
the European Commission on a competitive
basis for EU funding projects while we
remain in the EU (e.g. before Exit day), for
the lifetime of the project;
c. The payment of awards where UK
organisations successfully bid to the
European Commission on a competitive
basis to participate as a 3rd country after
Exit, and until the end of 2020, for the
lifetime of the project; and,
d. The current level of agricultural funding
under CAP Pillar 1 until 31 December 2020.
• The financial settlement was agreed in principle
by both the UK and EU, as set out in the draft
Withdrawal Agreement of 25th November 2018.
The guarantee will therefore only be called
in the event that the Withdrawal Agreement
is not ratified in the case of no deal, and UK
organisations are unable to access EU funding.
• On 29 March 2017, the UK Government
submitted its notification to leave the EU in
accordance with Article 50. The triggering
of Article 50 started a two-year negotiation
process between the UK and the EU. On
11 April 2019, the government confirmed
agreement with the EU on an extension until
31 October 2019 at the latest, with the option
to leave earlier as soon as a deal has been
ratified. Any subsequent changes in legislation,
regulation and funding arrangements are subject
to the outcome of the negotiations. As a result,
an unquantifiable contingent liability is disclosed.
In accordance with accounting standards, no
contingent assets can be recognised.
Others
• A liability could arise through non-compliance
with the Cogeneration Directive (2004/8/EC) in
the event of incorrect certification of combined
heat and power plants by contractors of the
Department.
• A contingent liability exists in respect of
the risks associated with the Department
assuming responsibility for uplifts in pension
contributions for the UK Atomic Energy
Authority’s non-active pension scheme
members.
• The Secretary of State Investor Agreement
(SOSIA) provides protections in certain
scenarios where the Hinkley Point C
nuclear plant is shut down for reasons that
are political or due to certain changes in
insurance arrangements or certain changes
in law. Payments under the SOSIA would
be expected in the first instance to be made
using funds from the Supplier Obligation
but in certain circumstances they could also
come direct from the Secretary of State,
relying on spending powers granted under
the relevant Appropriation Act or, if payments
were to be made over a period longer than
two years, seeking a new spending power at
the time. The payments could be up to around
£22 billion excluding non-decommissioning
operational costs that may be incurred after
any shutdown. However, the liability to make
payments under the SOSIA is almost entirely
within the control of HM Government.
Unquantifiable remote contingent liabilities:
agencies and departmental ALBs
• UK Space Agency has an unquantifiable
contingent liability arising from the international
(UN) convention, which requires the UK
Government to be ultimately liable for third
party costs from accidental damage arising
from UK space activities. To manage the risk
to the Government, the Outer Space Act 1986
requires licensees to indemnify HMG against
any proven third party costs. In March 2015
the Outer Space Act 1986 was amended to
cap the previously unlimited liability for licensed
activities. The cap is set at €60 million euro
for the majority of missions. This amendment
came into force from 1 October 2015 and was

Annual report and accounts 2018-19
106
designed to adequately balance the risk to
the UK Government whilst ensuring UK space
operators remain competitive internationally.
There is a requirement on licensees to obtain
third party liability insurance (set at €60 million
euro for the majority of missions) for the
duration of the licensed activity, with the UK
Government a named beneficiary.
• UKRI, through STFC, collaborates with a
number of other international partners in
the funding, management and operation of
technical facilities which are not owned by
STFC. In the event of a decision to withdraw
from any of these arrangements, it is likely
that STFC would assist in the search for a
replacement partner to ensure that technical
commitments were met. The most significant
international collaborations are in respect of
CERN and ESO. For both of these facilities
there is the possibility that STFC would be
obliged to contribute to decommissioning
costs arising from a decision taken to
discontinue operations. The decisions to
decommission are not wholly within STFC’s
control.
• The NDA has non-quantifiable contingent
liabilities arising from indemnities given as
part of the contracts for the management of
the nuclear site license companies. These
indemnities are in respect of the uninsurable
residual risk that courts in a country which
is not party to the Paris and Brussels
Conventions on third party liability in the field
of nuclear energy may accept jurisdiction to
determine liability in the event of a nuclear
incident. Indemnities are in place in respect of
Magnox, LLWR and Dounreay as set out in the
relevant Parent Body Agreements. In addition,
indemnities are provided to the previous
Parent Body Organisations (PBOs) of Magnox
and Sellafield covering the periods of their
ownership.
Other potential or expected
liabilities
The department has entered into the following
arrangements, details of which are provided in
the interests of transparency. Neither of them is a
contingent liability requiring disclosure under IAS
37, the Government Financial Reporting Manual
or Managing Public Money as the obligating
events did not exist at the reporting date.
Hinkley Point C Funded Decommissioning
Programme (FDP) and Waste Transfer
Contracts (WTCs)
The contract with NNB Generation Company
Limited (NNB) to build Hinkley Point C (HPC)
nuclear power plant includes a Contract for
Difference between NNB and the Low Carbon
Contracts Company Ltd, an FDP and associated
FDP documents including WTCs between NNB
and the core Department.
The FDP and related documents including WTCs
require NNB to make prudent provision for their
waste and decommissioning liabilities. To meet
their liabilities, the operator must set up a fund
with an independent governance framework and
will pay into it so that it is on track to fund the
liabilities that arise from decommissioning and
waste management. The fund will report annually
to the Secretary of State and a full review will
be conducted every five years to ensure that
the fund is on track to meet all its liabilities. If it
is off track, the operator will be required to take
corrective action. These liabilities are strictly the
operator’s responsibility and the probability of
taxpayers picking up these liabilities is remote.
Alongside the FDP, the government has entered
into two WTCs. These set out terms on which
the government will take title to and liability for the
spent fuel and intermediate level waste (ILW) from
the site after decommissioning in order to dispose
of the waste safely. The WTCs have generally
been prepared in line with the government’s
published waste transfer pricing methodology.4
Although the WTCs provide a default price based
on today’s best estimate, they allow the waste
transfer price to be set after a specified later date.
The final price agreed is subject to a cap, but
4
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/42629/3798-waste-transfer-pric­
ing-methodology.pdf

Accountability report
107
the likelihood of the future costs exceeding the
agreed cap is considered remote.
Capacity agreements
The European Court of Justice (ECJ) ruling of
15 November 2018 has resulted in a ‘Standstill
Period’ for the Capacity Market during which
no State Aid (in the form of capacity payments)
can be paid to capacity providers in relation to
the annulled Main Scheme Approval. Electricity
Settlements Company Limited (ESC), has
subsequently made no capacity payments
relating to Main Scheme Approval since the ruling.
This means that no payments have been made in
respect of the 2018/19 Delivery Year (which runs
from October 2018 to September 2019). Prior
to 15 November 2018, the company made total
capacity payments of £175.6 million in respect of
capacity agreements awarded in relation to Main
Scheme Approval and Early Capacity Auction.
The ECJ’s decision to annul the Main Scheme
Approval did not affect the Early Capacity
Auction approval, which continues to remain in
place unaffected.
The company completed making all capacity
payments required in relation to the Early
Capacity Auction in November 2018 and, as the
term of the relevant capacity agreements has
now expired, no further capacity payments are
due in respect of the Early Capacity Auction.
The Delivery Year for the Capacity Market runs
from 1 October to 30 September of each year.
The capacity payments made by ESC in respect
of the last two financial years are summarised in
the following table:
Capacity Market payments
31 March 2019
£m
31 March 2018
£m
Main Scheme Approval (SA.35980) – Transitional Arrangement Auction
2016/2017 (Delivery Year – October 2016 to September 2017)
-
7.4
Main Scheme Approval (SA.35980) - Transitional Arrangement Auction
2017/2018 (Delivery Year – October 2017 to September 2018)
5.6
7.2
SA. 44475 – Early Capacity Auction 2017/2018 (Delivery Year – October
2017 – September 2018)
170.0
206.1
Total capacity payments
175.6
220.7
The department has responsibility for administering the settlement process. This role is undertaken
by ESC. The obligation for ESC to make capacity payments only arises when the respective levy is
received from licensed suppliers and the generator provides the agreed level of capacity. The potential
income and payments arising from these arrangements are outlined in the following table:
31 March 2019
31 March 2018
Due
within 1
year
Due
within
2 to 5
years
Due
over 5
years
Total
Due
within 1
year
Due
within
2 to 5
years
Due
over 5
years
Total
£m
£m
£m
£m
£m
£m
£m
£m
Capacity Market - ESC
-
-
-
-
700
3,185
1,166
5,051
Income from levy - ESC
-
-
-
-
(700)
(3,185)
(1,166)
(5,051)
Total
Departmental Group
-
-
-
-
-
-
-
-

Alex Chisholm
Permanent Secretary and
Principal Accounting Officer
8 July 2019

Annual report and accounts 2018-19
108
The Certificate and Report of the Comptroller
and Auditor General to the House of
Commons
Opinion on financial statements
I certify that I have audited the financial
statements of the Department for Business,
Energy and Industrial Strategy (“the Department”)
and of its Departmental Group for the year
ended 31 March 2019 under the Government
Resources and Accounts Act 2000. The
Department comprises the core Department and
its agencies. The Departmental Group consists
of the Department and the bodies designated
for inclusion under the Government Resources
and Accounts Act 2000 (Estimates and
Accounts) Order 2018. The financial statements
comprise: The Department’s and Departmental
Group’s Statements of Comprehensive Net
Expenditure, Financial Position, Cash Flows,
Changes in Taxpayers’ Equity; and the related
notes, including the significant accounting
policies. These financial statements have been
prepared under the accounting policies set out
within them.
I have also audited the Statement of
Parliamentary Supply and the related notes,
and the information in the Accountability Report
that is described in that report as having
been audited.
In my opinion:
• the financial statements give a true and fair
view of the state of the Department’s and the
Departmental Group’s affairs as at 31 March
2019 and of the Department’s net expenditure
and Departmental Group’s net expenditure for
the year then ended; and
• the financial statements have been properly
prepared in accordance with the Government
Resources and Accounts Act 2000 and HM
Treasury directions issued thereunder.
Emphasis of matter – Provision for
nuclear decommissioning, recognition of
income for waste treatment performance
obligations and Contracts for Difference
(CfDs) derivatives
Without qualifying my opinion, I draw attention
to the disclosures made in notes 1.26 and
19.1 to the financial statements concerning
the uncertainties inherent in the nuclear
decommissioning provisions. As set out in these
notes, given the very long timescales involved
and the complexity of the plants and materials
being handled, a considerable degree of
uncertainty remains over the value of the liability
for decommissioning nuclear sites designated
by the Secretary of State. Significant changes to
the liability could occur as a result of subsequent
information and events which are different from
the current assumptions adopted. Note 19.1
shows the decrease in the liability during the
year to 31 March 2019 arising from the changes
in the long-term discount rate, underlining the
uncertainty inherent in management’s estimate
associated with the long timescales involved and
discount rate assumptions.
I also draw attention to the disclosures made in
note 1.6.2 to the financial statements concerning
the recognition of income for waste treatment
performance obligations within reprocessing
contracts. As set out in that note the Department
has accounted for the waste treatment elements
of overseas reprocessing contracts on a portfolio
basis alongside the waste treatment elements of
other reprocessing contracts. Management have
adopted this treatment as they do not consider
that income recognition, in the context of the
Department’s derogation from HMT Treasury to
apply IFRS 15 on a prospective only basis would
otherwise reflect the overall progress of the waste
treatment programme.
Finally, I also draw attention to the disclosures
made in notes 1.26 and 9 to the financial
statements concerning the measurement of
liabilities relating to CFDs. As described, the
fair value of these liabilities is highly sensitive
to assumptions regarding future prices and
volumes, particularly in view of the long
timescales involved. As disclosed in note 9, the

Accountability report
109
Department has concluded that the uncertainty
over the valuation of the CFD for Hinkley Point
C is such that the liability does not meet the
recognition criteria set out in the Conceptual
Framework for Financial Reporting.
Opinion on regularity
In my opinion, in all material respects:
• the Statement of Parliamentary Supply
properly presents the outturn against voted
Parliamentary control totals for the year ended
31 March 2019 and shows that those totals
have not been exceeded; and
• the income and expenditure recorded in the
financial statements have been applied to
the purposes intended by Parliament and the
financial transactions recorded in the financial
statements conform to the authorities which
govern them.
Basis of opinions
I conducted my audit in accordance with
International Standards on Auditing (ISAs)
(UK) and Practice Note 10 ‘Audit of Financial
Statements of Public Sector Entities in the
United Kingdom’. My responsibilities under those
standards are further described in the Auditor’s
responsibilities for the audit of the financial
statements section of my certificate. Those
standards require me and my staff to comply
with the Financial Reporting Council’s Revised
Ethical Standard 2016. I am independent of
the Department in accordance with the ethical
requirements that are relevant to my audit and
the financial statements in the UK. My staff and
I have fulfilled our other ethical responsibilities in
accordance with these requirements. I believe
that the audit evidence I have obtained is
sufficient and appropriate to provide a basis for
my opinion.
Conclusions relating to going concern
I am required to conclude on the appropriateness
of management’s use of the going concern
basis of accounting and, based on the
audit evidence obtained, whether a material
uncertainty exists related to events or conditions
that may cast significant doubt on the the
group’s and the Department’s ability to continue
as a going concern for a period of at least
twelve months from the date of approval of
the financial statements. If I conclude that a
material uncertainty exists, I am required to draw
attention in my auditor’s report to the related
disclosures in the financial statements or, if
such disclosures are inadequate, to modify my
opinion. My conclusions are based on the audit
evidence obtained up to the date of my auditor’s
report. However, future events or conditions
may cause the entity to cease to continue as
a going concern. I have nothing to report in
these respects.
Responsibilities of the Accounting Officer
for the financial statements
As explained more fully in the Statement of
Accounting Officer’s Responsibilities, the
Accounting Officer is responsible for the
preparation of the financial statements and for
being satisfied that they give a true and fair view.
Auditor’s responsibilities for the audit of the
financial statements
My responsibility is to audit, certify and report on
the financial statements in accordance with the
Government Resources and Accounts Act 2000.
An audit involves obtaining evidence about
the amounts and disclosures in the financial
statements sufficient to give reasonable
assurance that the financial statements are free
from material misstatement, whether caused by
fraud or error. Reasonable assurance is a high
level of assurance but is not a guarantee that an
audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when
it exists. Misstatements can arise from fraud or
error and are considered material if, individually
or in the aggregate, they could reasonably be
expected to influence the economic decisions
of users taken on the basis of these financial
statements.
As part of an audit in accordance with ISAs
(UK), I exercise professional judgment and
maintain professional scepticism throughout the
audit. I also:
• identify and assess the risks of material
misstatement of the financial statements,
whether due to fraud or error, design and
perform audit procedures responsive to
those risks, and obtain audit evidence that is

Annual report and accounts 2018-19
110
sufficient and appropriate to provide a basis
for my opinion. The risk of not detecting a
material misstatement resulting from fraud
is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override
of internal control.
• obtain an understanding of internal control
relevant to the audit in order to design audit
procedures that are appropriate in the
circumstances, but not for the purpose of
expressing an opinion on the effectiveness
of the group’s and the Department’s
internal control.
• evaluate the appropriateness of accounting
policies used and the reasonableness of
accounting estimates and related disclosures
made by management.
• evaluate the overall presentation, structure and
content of the financial statements, including
the disclosures, and whether the consolidated
financial statements represent the underlying
transactions and events in a manner that
achieves fair presentation.
• obtain sufficient appropriate audit evidence
regarding the financial information of the
entities or business activities within the Group
to express an opinion on the group financial
statements. I am responsible for the direction,
supervision and performance of the group
audit. I remain solely responsible for my
audit opinion.
I communicate with those charged with
governance regarding, among other matters,
the planned scope and timing of the audit and
significant audit findings, including any significant
deficiencies in internal control that I identify
during my audit.
I am required to obtain evidence sufficient to
give reasonable assurance that the Statement
of Parliamentary Supply properly presents the
outturn against voted Parliamentary control totals
and that those totals have not been exceeded.
The voted Parliamentary control totals are
Departmental Expenditure Limits (Resource
and Capital), Annually Managed Expenditure
(Resource and Capital), Non-Budget (Resource)
and Net Cash Requirement. I am also required
to obtain evidence sufficient to give reasonable
assurance that the expenditure and income
recorded in the financial statements have been
applied to the purposes intended by Parliament
and the financial transactions recorded in the
financial statements conform to the authorities
which govern them.
Other Information
The Accounting Officer is responsible for
the other information. The other information
comprises information included in the annual
report, other than the parts of the Accountability
Report described in that report as having
been audited, the financial statements and my
auditor’s report thereon. My opinion on the
financial statements does not cover the other
information and I do not express any form of
assurance conclusion thereon. In connection
with my audit of the financial statements, my
responsibility is to read the other information
and, in doing so, consider whether the other
information is materially inconsistent with
the financial statements or my knowledge
obtained in the audit or otherwise appears to
be materially misstated. If, based on the work
I have performed, I conclude that there is a
material misstatement of this other information, I
am required to report that fact. I have nothing to
report in this regard.
Opinion on other matters
In my opinion:
• the parts of the Accountability Report to
be audited have been properly prepared in
accordance with HM Treasury directions
made under the Government Resources and
Accounts Act 2000;
• in the light of the knowledge and
understanding of the group and the parent
and its environment obtained in the course
of the audit, I have not identified any material
misstatements in the Performance Report or
the Accountability Report; and
• the information given in the Performance and
Accountability Reports for the financial year for
which the financial statements are prepared is
consistent with the financial statements.

Accountability report
111
Matters on which I report by exception
I have nothing to report in respect of the following
matters which I report to you if, in my opinion:
• adequate accounting records have not been
kept or returns adequate for my audit have not
been received from branches not visited by
my staff; or
• the financial statements and the parts of the
Accountability Report to be audited are not in
agreement with the accounting records and
returns; or
• I have not received all of the information and
explanations I require for my audit; or
• the Governance Statement does not reflect
compliance with HM Treasury’s guidance.
Report
I have no observations to make on these financial
statements.
Gareth Davies
Comptroller and Auditor General
National Audit Office
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP
10 July 2019

Financial
Statements
The ExoMars rover is being built in Stevenage. It will the first
of its kind to roam around Mars and study it in depth.

Financial Statements
113
Consolidated Statement of
Comprehensive Net Expenditure
for the period ended 31 March 2019
31 March 2019
31 March 2018 restated
Continuing operations
Note
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
Income from sale of goods and services
6.1
(749)
(3,260)
(1,023)
(3,341)
Total operating income
(749)
(3,260)
(1,023)
(3,341)
Staff costs
3
330
1,119
273
1,025
Purchase of goods and services
4.1
1,424
2,943
1,542
2,817
Depreciation and impairment charges
4.2
55
607
91
666
Provision expense
4.3
59
(97,721)
182
75,433
Grants
4.4
12,907
8,280
11,935
7,545
Other operating expenditure
4.5
(4)
(45)
(6)
(89)
Total operating expenditure
14,771
(84,817)
14,017
87,397
Net operating expenditure
14,022
(88,077)
12,994
84,056
Finance income
6.2
(214)
(251)
(184)
(350)
Finance expense
5
(249)
(3,855)
(19)
(1,206)
Contracts for difference derivatives
9
-
(1,991)
-
4,102
Share of post-tax profits of associates
and joint ventures
13
-
(186)
-
-
Net expenditure for the year from
continuing operations
13,559
(94,360)
12,791
86,602
Profit on disposal of Green
Investment Bank
15
-
-
(186)
(202)
Net expenditure for the year from
discontinuing operations
15
-
-
-
11
Net expenditure for the year
13,559
(94,360)
12,605
86,411
Other Comprehensive Income and
Expenditure
Net (gain)/loss on:
Items that will not be reclassified to net
operating expenditure:
- revaluation of property, plant and
equipment
-
(145)
-
(52)
- revaluation of intangible assets
-
(19)
-
(31)
Items that may be reclassified
subsequently to net operating costs:

Annual report and accounts 2018-19
114
31 March 2019
31 March 2018 restated
Continuing operations
Note
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
- revaluation of investments
(35)
(63)
(114)
(165)
- other revaluation movements
56
2
2
15
- actuarial (gains)/losses
-
69
-
(123)
- joint venture and associate other
movements
-
(35)
-
-
Total other comprehensive net
income and expenditure from
continuing operations
21
(191)
(112)
(356)
Total other comprehensive net
income and expenditure from
discontinuing operations
-
-
-
5
Total other comprehensive net
income and expenditure
21
(191)
(112)
(351)
Comprehensive net expenditure for
the year
13,580
(94,551)
12,493
86,060
All operations are continuing apart from those included in note 15.
Further analysis of staff costs can be found in the Staff cost note in the Accountability
report on page 70.
The Notes on pages 123 to 225 form part of these Accounts.

Financial Statements
115
Consolidated Statement of Financial Position
as at 31 March 2019
31 March 2019
31 March 2018 restated
1 April 2017 restated
Note
Core
Department
and
Agencies
Departmental
Group
Core
Department
and
Agencies
Departmental
Group
Core
Department
and
Agencies
Departmental
Group
£m
£m
£m
£m
£m
£m
Non-current assets:
Property, plant
and equipment
7
294
3,533
276
3,414
264
3,422
Investment
properties
-
117
23
145
31
151
Intangible
assets
8
14
167
9
145
6
103
Investment and
loans in public
bodies
10
3,348
1,758
2,996
1,630
2,171
1,317
Other financial
assets
11
1,196
4,098
1,028
4,194
1,484
4,082
Recoverable
contract costs
12
-
1,620
-
3,346
-
2,870
Derivative
financial
instruments
23
7
7
47
78
64
70
Investment in
joint ventures
and associates
13
-
1,039
-
367
-
347
Trade and other
receivables
14
813
938
932
1,090
305
399
Total non-current
assets
5,672
13,277
5,311
14,409
4,325
12,761
Current assets:
Inventories
-
37
-
31
-
33
Non-current
assets held for
sale
15
-
20
-
15
1,517
2,609
Trade and other
receivables
14
447
1,568
544
1,343
438
1,301
Investments
and loans in
public bodies
16
666
620
732
732
682
682
Other financial
assets
11
-
-
142
142
1
1
Derivative
financial
instruments
23
17
17
31
31
31
42
Cash and cash
equivalents
17
1,283
2,088
1,246
2,034
1,192
1,819
Total current
assets
2,413
4,350
2,695
4,328
3,861
6,487
Total assets
8,085
17,627
8,006
18,737
8,186
19,248

Annual report and accounts 2018-19
116
31 March 2019
31 March 2018 restated
1 April 2017 restated
Note
Core
Department
and
Agencies
Departmental
Group
Core
Department
and
Agencies
Departmental
Group
Core
Department
and
Agencies
Departmental
Group
£m
£m
£m
£m
£m
£m
Current liabilities:
Trade payables
and other
liabilities
18
(2,908)
(5,652)
(2,283)
(4,954)
(2,248)
(4,894)
Provisions for
liabilities and
charges
19
(260)
(3,050)
(278)
(3,332)
(289)
(3,582)
Financial
guarantees
and loan
commitment
liabilities
20
(11)
(11)
(16)
(16)
(18)
(18)
Derivative
financial
instruments
23
(1)
(13)
-
(11)
-
-
Non-current
liabilities held
for sale
15
-
-
-
-
-
(1,000)
Total current
liabilities
(3,180)
(8,726)
(2,577)
(8,313)
(2,555)
(9,494)
Non-current
assets plus/
less net
current
assets/
liabilities
4,905
8,901
5,429
10,424
5,631
9,754
Non-current
liabilities:
Trade payables
and other
liabilities
18
(1,141)
(2,901)
(1,203)
(2,901)
(1,023)
(2,460)
Provisions for
liabilities and
charges
19
(1,920)
(131,416)
(2,176)
(237,603)
(2,297)
(165,931)
Financial
guarantees
and loan
commitment
liabilities
20
(43)
(219)
(45)
(45)
(43)
(43)
Derivative
financial
instruments
9, 23
(2)
(12,923)
-
(15,904)
-
(12,339)
Retirement
benefit
obligations
21
-
(921)
-
(686)
-
(877)
Total non-current
liabilities
(3,106)
(148,380)
(3,424)
(257,139)
(3,363)
(181,650)
Total assets
less liabilities
1,799
(139,479)
2,005
(246,715)
2,268
(171,896)
Taxpayers’ equity
and other reserves:

Financial Statements
117
31 March 2019
31 March 2018 restated
1 April 2017 restated
Note
Core
Department
and
Agencies
Departmental
Group
Core
Department
and
Agencies
Departmental
Group
Core
Department
and
Agencies
Departmental
Group
£m
£m
£m
£m
£m
£m
General fund
1,077
(142,304)
995
(250,098)
1,364
(175,148)
Revaluation
reserve
722
2,155
1,010
2,915
904
2,813
Non-current
assets held for
sale revaluation
reserve
-
-
-
-
15
Charitable
funds
-
438
-
314
-
319
Non-controlling
interests
-
232
-
154
-
105
Total equity
1,799
(139,479)
2,005
(246,715)
2,268
(171,896)

Core Department and Agencies comprise the core Department and the UK Space Agency and
Insolvency Service.
The Notes on pages 123 to 225 form part of these Accounts.
Alex Chisholm
Permanent Secretary and
Principal Accounting Officer
8 July 2019

Annual report and accounts 2018-19
118
Consolidated Statement of Cash Flows
for the period ended 31 March 2019
2018-19
2017-18 restated
Note
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Cash flows from operating activities
Net operating cost
(13,559)
94,360
(12,605)
(86,400)
Net operating cost from discontinuing
operations
-
-
-
(11)
Adjustment for non-cash expenditure
(151)
(103,085)
(60)
78,517
(Increase)/decrease in inventories
-
(6)
-
2
(Increase)/decrease in trade and other
receivables
14
216
(73)
(733)
(733)
Less movements in receivables
relating to items not passing through
the Consolidated Statement of
Comprehensive Net Expenditure
(71)
(71)
(7)
(7)
Increase/(decrease) in trade payables
and other liabilities
18
563
698
215
501
Less movements in payables
relating to items not passing through
the Consolidated Statement of
Comprehensive Net Expenditure
(730)
(1,531)
(54)
(294)
Use of provisions
19
(284)
(3,078)
(284)
(3,238)
Financial guarantees called in
20
(11)
(11)
(11)
(11)
Expenditure funded by the National
Insurance Fund (RPS)
4.1
320
320
260
260
Payments to retirement benefit
obligations
-
(144)
-
(19)
Net cash outflow from operating
activities
(13,707)
(12,621)
(13,279)
(11,433)
Cash flows from investing activities
Purchase of property, plant and
equipment
(46)
(312)
(48)
(353)
Purchase of intangible assets
(8)
(36)
(4)
(33)
Proceeds of disposal of property, plant
and equipment
-
3
11
106
Proceeds of disposal of investment
property
20
20
11
11
Proceeds of disposal of assets held for
sale
-
-
1,753
1,785
Adjustments for proceeds from disposal
of assets held for sale and other assets
-
-
(1,639)
(1,620)
Loan redeemed from Post Office Limited
16
6,360
6,360
7,168
7,168
Loans made to Post Office Limited
16
(6,240)
(6,240)
(7,198)
(7,198)
Repayments of loans and investments
33
855
22
431
Payments to the Contracts for Difference
generators
9
-
(980)
-
(544)
Other investments and loans made
(330)
(1,009)
(253)
(798)
Launch investment receipts
230
230
102
102

Financial Statements
119
2018-19
2017-18 restated
Note
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Venture capital fund redemptions
7
121
181
110
Venture capital fund investments
-
(235)
(8)
(121)
Dividends from joint ventures and
associates
13
-
87
-
-
Disposal of joint venture and associates
-
-
-
1
Investment in joint ventures and
associates
13
-
(37)
-
(7)
Investment in assets held for sale
-
-
(50)
(7)
Investment in shares
(125)
-
(393)
(30)
Repayment of shares
-
-
7
-
Net cash outflow from investing
activities
(99)
(1,173)
(338)
(997)
Cash flows from financing activities
From Consolidated Fund (supply) –
current year
14,139
14,139
13,568
13,568
Advances from the Contingencies Fund
5
5
2
2
Repayments to the Contingencies Fund
(7)
(7)
-
-
From the National Insurance Fund
320
320
260
260
Payments in respect of the National
Insurance Fund
4.1
(320)
(320)
(260)
(260)
Issue of share capital
-
-
-
3
Disposal of shares
-
3
-
-
Net financing
14,137
14,140
13,570
13,573
Net increase/(decrease) in cash
and cash equivalents in the period
before adjustment for receipts and
payments to the Consolidated Fund
331
346
(47)
1,143
Receipts due to the Consolidated Fund
which are outside the scope of the
Department’s activities
1,463
1,465
2,684
1,655
Payments of amounts due to the
Consolidated Fund
(1,757)
(1,757)
(2,583)
(2,583)
Net increase/(decrease) in cash
and cash equivalents in the period
after adjustment for receipts and
payments to the Consolidated Fund
37
54
54
215
Cash and cash equivalents opening
balance
1,246
2,034
1,192
1,819
Cash and cash equivalents at the
end of the period
17
1,283
2,088
1,246
2,034

Annual report and accounts 2018-19
120
Statement of Changes in Taxpayers’ Equity
(Core Department and Agencies)
for the period ended 31 March 2019
General Fund
restated
Revaluation
reserve
Taxpayers’
equity
restated
Total
Reserves
restated
Note
£m
£m
£m
£m
Balance at 1 April 2017
1,364
904
2,268
2,268
Net parliamentary funding – drawn down
13,568
-
13,568
13,568
Net parliamentary funding – deemed
977
-
977
977
National Insurance Fund - RPS
4.1
260
-
260
260
Supply (payable)/receivable adjustment
18
(928)
-
(928)
(928)
Income payable to the Consolidated Fund
(1,640)
-
(1,640)
(1,640)
Decrease in RPS receivables
14
(7)
-
(7)
(7)
Net expenditure for the year
(12,605)
-
(12,605)
(12,605)
Non-Cash Adjustments:
Auditors’ remuneration
4.1
1
-
1
1
Movements in Reserves:
Other comprehensive net expenditure for
the year
-
112
112
112
Transfers between reserves
5
(5)
-
-
Other movements
-
(1)
(1)
(1)
Balance at 31 March 2018
995
1,010
2,005
2,005
IFRS 9 opening balance adjustments
277
(263)
14
14
Revised balance at 1 April 2018
1,272
747
2,019
2,019
Net parliamentary funding – drawn down
14,139
-
14,139
14,139
Net parliamentary funding – deemed
928
-
928
928
National Insurance Fund - RPS
4.1
320
-
320
320
Supply (payable)/receivable adjustment
18
(1,280)
-
(1,280)
(1,280)
Income payable to the Consolidated Fund
(675)
-
(675)
(675)
Decrease in RPS receivables
14
(71)
-
(71)
(71)
Net expenditure for the year
(13,559)
-
(13,559)
(13,559)
Non-Cash Adjustments:
Auditors’ remuneration
4.1
1
-
1
1
Movements in Reserves:
Other comprehensive net income for
the year
-
(21)
(21)
(21)
Transfers between reserves
1
(1)
-
-
Other movements
1
(3)
(2)
(2)
Balance at 31 March 2019
1,077
722
1,799
1,799

Financial Statements
121
Consolidated Statement of Changes in Taxpayers’ Equity
(Departmental Group)
for the period ended 31 March 2019
General Fund
restated
Revaluation
Reserve
Non-current
Assets Held
for Sale
Revaluation
Reserve
Taxpayers’
Equity restated
Charitable
Funds -
Unrestricted/
Restricted
Non controlling
interest
Total Reserves
restated
Note
£m
£m
£m
£m
£m
£m
£m
Balance at 1 April 2017
(175,148)
2,813
15
(172,320)
319
105
(171,896)
Net parliamentary funding – drawn down
13,568
-
-
13,568
-
-
13,568
Net parliamentary funding – deemed
977
-
-
977
-
-
977
National Insurance Fund - RPS
4.1
260
-
-
260
-
-
260
Supply (payable)/receivable adjustment
14, 18
(928)
-
-
(928)
-
-
(928)
Income payable to the Consolidated
Fund
(2,489)
-
-
(2,489)
-
-
(2,489)
Decrease in RPS receivables
14
(7)
-
-
(7)
-
-
(7)
Net expenditure for the year
(86,411)
-
-
(86,411)
-
-
(86,411)
Amounts paid from distributable reserves
(162)
-
-
(162)
-
-
(162)
Non-Cash Adjustments:
Auditors’ remuneration
4.1
1
-
-
1
-
-
1
Movements in Reserves:
Other Comprehensive net (expenditure)/
income for the year
123
233
-
356
-
-
356
Transfers between reserves
108
(124)
(6)
(22)
(5)
-
(27)
Minority interest
-
-
-
-
-
49
49
Transfer to Statement of Comprehensive
Net Expenditure
-
-
(9)
(9)
-
-
(9)
Issue of share capital
3
-
-
3
-
-
3
Other movements
7
(7)
-
-
-
-
-
Balance at 31 March 2018
(250,098)
2,915
-
(247,183)
314
154
(246,715)

Annual report and accounts 2018-19
122
General Fund
restated
Revaluation
Reserve
Non-current
Assets Held
for Sale
Revaluation
Reserve
Taxpayers’
Equity restated
Charitable
Funds -
Unrestricted/
Restricted
Non controlling
interest
Total Reserves
restated
Note
£m
£m
£m
£m
£m
£m
£m
IFRS 9 opening balance adjustment
941
(926)
-
15
-
-
15
Revised balance at 1 April 2018
(249,157)
1,989
-
(247,168)
314
154
(246,700)
Net parliamentary funding – drawn down
14,139
-
-
14,139
-
-
14,139
Net parliamentary funding – deemed
928
-
-
928
-
-
928
National Insurance Fund - RPS
4.1
320
-
-
320
-
-
320
Supply (payable)/receivable adjustment
18
(1,280)
-
-
(1,280)
-
-
(1,280)
Income payable to the Consolidated
Fund
(1,331)
-
-
(1,331)
-
-
(1,331)
Decrease in RPS receivables
14
(71)
-
-
(71)
-
-
(71)
Net expenditure for the year
94,360
-
-
94,360
-
-
94,360
Amounts paid from distributable reserves
(131)
-
-
(131)
-
-
(131)
Non-Cash Adjustments:
Auditors’ remuneration
4.1
1
-
-
1
-
-
1
Movements in Reserves:
Other comprehensive net (expenditure)/
income for the year
(34)
225
-
191
-
-
191
Transfers between reserves
(55)
(60)
-
(115)
124
(9)
-
Minority interest
-
-
-
-
-
87
87
Other movements
7
1
-
8
-
-
8
Balance at 31 March 2019
(142,304)
2,155
-
(140,149)
438
232
(139,479)
The Notes on pages 123 to 225 form part of these Accounts.

Financial Statements
123
Notes to the Accounts
1 Accounting policies, judgements and estimates
1.1
Basis of accounting
These financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRS) as adapted and interpreted by the HM Treasury 2018-19 Financial Reporting Manual
(FReM) and as set out in the Accounts Direction to the department pursuant to section 5(2) of the
Government Resources and Accounts Act 2000 except as described at 1.2 below. Where the FReM
permits a choice of accounting policy, the policy selected is that judged to be most appropriate to the
particular circumstances of the department and its consolidated entities (the Group) for the purpose
of giving a true and fair view. The policies adopted by the Group are described below; they have been
applied consistently to items considered material to the accounts. Derogation has been obtained from
HM Treasury to apply IFRS 15 for NDA income on first time adoption in 2018-19 on a prospective
basis and therefore will not be required to report any retrospective adjustments.
The consolidated Statement of Financial Position shows significant net liabilities, primarily relating
to Contracts for Difference derivatives and provisions for nuclear decommissioning which will be
settled over many years. Liabilities in excess of those to be funded by the Group will be met by future
funding voted by Parliament annually in Supply and Appropriation Acts. There is no reason to believe
the resources to settle these liabilities will not be forthcoming. It has accordingly been considered
appropriate to adopt a going concern basis for the preparation of these financial statements.
1.2
Accounting convention
These accounts have been prepared under the historical cost convention modified to measure
property, plant and equipment (except specific waste management assets), intangibles, investment
properties and financial instruments at fair value to the extent required or permitted under IFRS as set
out in these policies.
The department has agreed with HM Treasury that specific nuclear waste management assets should
be measured at historical cost less any impairment losses where there is no reliable and cost effective
valuation methodology; this is a departure from the FReM requirement to report property, plant and
equipment at fair value. Public Dividend Capital and shares in bodies held by the core Department are
carried at historical cost less any impairment in accordance with the FReM.
1.3
Presentational currency
The financial statements are presented in pounds sterling, the functional currency of the Group.
Transactions denominated in a foreign currency are translated into sterling at the rate of exchange
on the date of each transaction. In preparing the financial statements, monetary assets and liabilities
denominated in foreign currencies are translated at the rates prevailing at the reporting date. All
translation differences of monetary assets and liabilities are included in Net expenditure for the year.
Values are rounded to the nearest million pounds (£m) unless the FReM requires a lower threshold.
1.4
Basis of consolidation
The Group accounts consolidate the balances of the core Department and designated bodies
listed in note 28, which fall within the departmental boundary as defined in the FReM and make up
the ‘Departmental Group’, excluding transactions and balances between them. Where the Office
for National Statistics (ONS) designates a body retrospectively such that the body should have
been designated for consolidation in a prior period, the accounts are voluntarily restated to reflect
the position from the effective date of classification. The consolidated bodies prepare accounts in
accordance with either the FReM, the Charities’ Statement of Recommended Practice (for charities),
or the Companies Act 2006 (for limited companies). For those bodies that do not prepare accounts
in accordance with the FReM, adjustments are made at consolidation if necessary where differences
would have a significant effect on the accounts. The core Department and its designated bodies are
all domiciled in the UK.

Annual report and accounts 2018-19
124
1.5
Changes in accounting policies
Accounting policies for financial instruments and revenues from contracts with customers have
been updated to reflect the new accounting standards adopted in the year. Detail of new accounting
standards and FReM changes is discussed in note 1.6 below.
1.6
New accounting standards adopted in the year and FReM changes
1.6.1 IFRS 9 ‘Financial Instruments’
IFRS 9 ‘Financial Instruments’ replaces IAS 39 ‘Financial Instruments: Recognition and Measurement’
and was adopted by the public sector from 1 April 2018. The FReM removes the option to adopt
IFRS 9 retrospectively, and therefore the Group has recognised any adjustments to the carrying
amounts of financial assets and liabilities at the date of transition in the opening retained earnings and
other reserves of the current period. Consequently, amendments to IFRS 7 ‘Financial Instruments:
Disclosures’ have also been applied to the current period only. The adoption of IFRS 9 has resulted in
changes to the accounting policies for classification, measurement and impairment of financial assets.
Classification and measurement of financial assets
IFRS 9 contains three principal classification categories for financial assets: amortised cost, fair value
through other comprehensive income (FVOCI), and fair value through profit or loss (FVTPL). The
classification of financial assets under IFRS 9 is based on the business model in which a financial
asset is managed and its contractual cash flow characteristics. IFRS 9 removes the previous IAS 39
categories of held to maturity, loans and receivables and available for sale. Derivatives embedded in
contracts where the host is a financial asset in scope of the standard are never separated. Instead,
the hybrid financial instrument as a whole is assessed for classification.
Under IFRS 9, the requirement for classifying and measuring financial assets is that:
• Loans and other debt instruments are classified as either amortised cost, FVOCI or FVTPL,
dependent on the business model and cash flow characteristics of the financial assets
• Investments in equity instruments are classified as FVTPL, unless an irrevocable election is made
on initial recognition to recognise subsequent changes in fair value in Other Comprehensive Income
(OCI). The election is only available to equity instruments that are not held for trading.
• Derivatives are classified as FVTPL
Classification and measurement of financial liabilities
Financial liabilities are classified and subsequently measured at amortised cost, except for:
• Financial liabilities at fair value through profit or loss, which is applied to derivatives and other
financial liabilities designated as such at initial recognition
• Financial liabilities arising from the transfer of financial assets which did not qualify for derecognition,
whereby a financial liability is recognised for the consideration received for the transfer
• Financial guarantee contracts and loan commitments
Impairment
IFRS 9 replaces the ‘incurred loss model’ in IAS 39 with a forward looking ‘expected credit loss’ (ECL)
model. The new impairment model applies to financial assets measured at amortised cost, contract
assets and debt investments at FVOCI, but not to investments in equity instruments and FVTPL
financial assets. The accounting policy for impairment of financial assets can be found in note 1.20
and the impairment methodology is detailed in the financial instruments note 23.
(a) Reconciliation of carrying amounts of financial assets under IAS 39 and IFRS 9
The following table reconciles the carrying amounts of financial assets under IAS 39 to the carrying
amounts under IFRS 9 on 1 April 2018:

Financial Statements
125
Reconciliation
Carrying amount under IFRS 9 at
1 April 2018
Carrying
amount under
IAS 39 at 31
March 2018
Transfer
between
categories
Transfer to
associates
Transfer of
embedded
derivatives
Re-measurement
under IFRS 9
Carrying
amount under
IFRS 9 at 1
April 2018
Amortised
cost
FVOCI
designated
FVTPL
£m
£m
£m
£m
£m
£m
£m
£m
£m
Loans and Receivables
Cash and cash equivalents
2,034
-
-
-
-
2,034
2,034
-
-
Receivables
2,001
-
-
-
(2)
1,999
1,999
-
-
Loans to public sector bodies
943
-
-
-
-
943
943
-
-
Loans to private sector entities
598
61
-
-
2
661
661
-
-
Term deposits
7
-
-
-
-
7
7
-
-
Held to maturity
Term deposits
7
-
-
-
-
7
7
-
-
Available for sale
Repayable Launch Investments
1,047
-
-
-
-
1,047
-
-
1,047
Ordinary shares in public sector
entities
1,337
-
-
-
-
1,337
-
1,337
-
Ordinary shares in private sector
entities
-
99
-
-
-
99
-
99
-
Property related holdings
42
(42)
-
-
-
-
-
-
-
Equities (listed securities)
269
(269)
-
-
-
-
-
-
-
Private equities
317
(317)
-
-
-
-
-
-
-
Investment funds
1,321
544
-
31
-
1,896
-
-
1,896
Other investments
669
(76)
(461)
-
-
132
-
-
132
Bonds
59
-
-
-
(1)
58
58
-
-
Fair value through profit or loss
Derivatives
109
-
-
(31)
78
-
-
78
Total financial assets
10,760
-
(461)
-
(1)
10,298
5,709
1,436
3,153

Annual report and accounts 2018-19
126
The Departmental Group’s accounting policies on the classification of financial instruments under
IFRS 9 are set out in note 1.20. The application of these policies resulted in the reclassifications set
out in the table above and explained below:
• Cash and cash equivalents, receivables, loans to public sector bodies, and term deposits that were
classified as ‘loans and receivables’ and ‘held to maturity’ are now measured at ‘amortised cost’.
There are no changes in terms of measurement for these assets upon transition.
• Loans to private sector entities that were classified as ‘loans and receivables’ under IAS 39 meet
the solely payments of principal and interest test for cash flows characteristics. The objective of the
business model is achieved by collecting the contractual cash flows only and therefore, they are
classified as ‘amortised cost’ under IFRS 9. An adjustment for the impairment allowance of
£2 million calculated under the ECL model was recognised in retained earnings at 1 April 2018.
• Bonds were classified as ‘available for sale’ and are now measured at ‘amortised cost’. The
Group’s intention is to hold these bonds for collecting contractual cash flows only. Sale of the
bonds only happens infrequently when there is an increase in the assets’ credit risk. Their cash
flows are solely payments of principal and interest. Upon transition, the cumulative gain previously
recognised in OCI was removed from equity and applied against the fair value of the financial asset
at the reclassification date resulting in an adjustment of £1 million to retained earnings and carrying
amount of the asset at 1 April 2018.
2019
From available for sale (IAS 39) to Amortised Cost
£m
Fair value as at 31 March 2018
59
Fair value gain/ (loss) that would have been recognised during the year if the financial asset
had not been reclassified.
(1)
• Repayable launch investments were classified as ‘available for sale’ with the revaluation movements
previously going through OCI. As the repayments are contingent on the sales of the products, they
do not meet the solely payments of principal and interest test and are measured at ‘FVTPL’. On
adoption, the cumulative gain or loss previously recognised in Revaluation Reserve of £235m as at
31 March 2018 has been transferred to the Taxpayer’s Equity.
• Ordinary shares in consolidated public sector entities were held at Cost under IAS 39/IAS 27, this
continues to be permitted under IFRS 9/IAS 27.
• Ordinary shares in non-consolidated public sector entities in accordance with the FReM were
classified as ‘available for sale’. The Group intends to hold these, for long term strategic purposes,
and as permitted by IFRS 9, have designated these investments at the date of initial application as
measured at ‘FVOCI’.
• Ordinary shares in private sector entities were classified as ‘available for sale’ under IAS 39. The
Group intends to hold these, except for the £3 million of shares held by UK Green Infrastructure
Platform (UKGIP), for long term strategic purposes, and as permitted by IFRS 9, have designated
these investments at the date of initial application as measured at ‘FVOCI’. The £3 million of
shares held by UKGIP, for trading, and therefore, the OCI option is not available and they are
measured at ‘FVTPL’.
• Investment funds were classified as ‘available for sale’. The holdings are standard investment funds
with either a limited life or redeemable units, and measured at ‘FVTPL’ as they are debt instruments
that do not meet the solely payments of principal and interest test.
 On adoption, the cumulative gain or loss previously recognised in Revaluation Reserve of
£926 million as at 31 March 2018 has been transferred to the Taxpayer’s Equity.
 The category transfer of £31 million from investment funds to ordinary shares in non-public
sector entities is related to the ordinary share holding in the Global Climate Partners Fund, which
is an investment company rather than a standard limited partnership fund with a limited life.

Financial Statements
127
• Loans that were previously classified as ‘available for sale’ within the Other Investments category
are those held by UKGIP. As they are held to sell, not to collect contractual cash flows, they fail the
business model test and are classified as ‘FVTPL’ under IFRS 9.
• Derivatives were classified as ‘fair value through profit and loss’ under IAS 39 and remain measured
at ‘FVTPL’ under IFRS 9. However, embedded derivatives are no longer assessed separately
from the host financial asset leading to a category transfer of £31 million from derivatives to
investment funds.
(b) Reconciliation of carrying amounts of financial liabilities under IAS 39 and IFRS 9
The following table reconciles the carrying amounts of financial assets under IAS 39 to the carrying
amounts under IFRS 9 on 1 April 2018:
Reconciliation
Carrying amount under
IFRS 9 at 1 April 2018
Carrying
amount
under
IAS 39 at
31 March
2018
Transfer
from
provisions
Remeasurement
under IFRS 9
Carrying
amount
under
IFRS 9
at 1 April
2018
Amortised
cost
FVTPL
designated
FVTPL
mandatory Other
£m
£m
£m
£m
£m
£m
£m
£m
Fair value
through
profit or
loss
Derivatives
(15,915)
-
-
(15,915)
-
-
(15,915)
-
Other
liabilities
Payables
(2,175)
-
-
(2,175)
(2,175)
-
-
-
Financial
guarantee
liabilities
(61)
-
16
(45)
-
-
-
(45)
Loan
commitment
liabilities
-
(184)
-
(184)
-
(184)
-
-
Total
financial
assets
(18,151)
(184)
16
(18,319)
(2,175)
(184)
(15,915)
(45)
The explanations of changes to financial liabilities under IFRS 9 are set out below:
• The core Department’s financial guarantee liabilities were remeasured under IFRS 9, leading to
£16 million decrease in the carrying amount, which was recognised in the adjustment to the general
fund opening balances.
• The British Business Bank (BBB)’s Enterprise Capital Fund commitments to provide loans under
market rates were designated under IFRS 9 to be measured at fair value through profit or loss
because the group of financial assets and financial liabilities is managed and its performance
is evaluated on a fair value basis, in accordance with a documented investment strategy and
information is provided internally on that basis to the key management personnel. For clarity, the
loan commitment liabilities were transferred out from provisions to be disclosed together with
financial guarantee liabilities.
(c) Impacts of transition to financial statement line items
The following table summarises the impact of transition to IFRS 9 on assets, revaluation reserve and
general fund at 31 March 2018:

Annual report and accounts 2018-19
128
Closing
balance
under
IAS 39 at 31
March 2018
Transfers
Gross carrying
amount
remeasurement
under IFRS 9
Expected
credit loss
remeasurement
under IFRS 9
Reclassification
from AFS to
amortised cost
Opening
balance
under
IFRS 9 at 1
April 2018
£m
£m
£m
£m
£m
£m
Receivables
2,001
-
-
(2)
-
1,999
Total impact
on current
assets
-
-
(2)
-
Other financial
assets
4,336
(430)
27
(25)
(1)
3,907
Investments
in joint
ventures and
associates
367
461
-
-
-
828
Total
impacts on
non-current
assets
31
27
(25)
(1)
Derivatives
(15,806)
(31)
-
-
-
(15,837)
Provisions
(240,935)
184
-
-
-
(240,751)
Financial
guarantee
and loan
commitment
liabilities
(61)
(184)
16
-
-
(229)
Total
impacts on
non-current
liabilities
(31)
16
-
-
General fund
250,098
(926)
(43)
27
1
249,157
Revaluation
reserve
(2,915)
926
-
-
-
(1,989)
Total
impacts on
reserves
-
(43)
27
1
1.6.2 IFRS 15 ‘Revenue from Contracts with Customers’
IFRS 15 ‘Revenue from Contracts with Customers’ replaces IAS 18 ‘Revenue’ and IAS 11
‘Construction Contracts’ and has been adopted by the public sector from 1 April 2018. The new
standard requires the Group to apportion revenue earned from contracts to individual promises,
or performance obligations, on a stand-alone selling price basis, based on a five-step model. The
FReM removes the option to adopt IFRS 15 retrospectively, and therefore any difference between
the previous carrying amount and the carrying amount under IFRS 15 has been recognised as
adjustments to opening balances on 1 April 2018.
The impacts on significant income streams are set out below.
Sales of goods and services
Within the scope of IFRS 15, the stream of income that has been significantly affected by the
new accounting standard is around £850 million from the service contracts held by Nuclear
Decommissioning Authority (NDA) for fuel reprocessing, waste and product storage, and the
transportation of spent fuel, waste and products. Due to the limited availability of consistent historical
data relating to the contracts and the extent to which the contracts and associated assumptions
have changed over time, NDA has obtained a derogation from HM Treasury to apply IFRS 15 on
first-time adoption in 2018-19 on a prospective basis, and therefore, will not be required to report any
retrospective adjustments for prior years. A derogation has been granted to the Group to this effect.

Financial Statements
129
Under the new standard, NDA’s income figure is subject to increased uncertainty as a higher
proportion of revenue recognition will be dependent on the performance of key plants at Sellafield in
the remainder of their commercial operations. In particular, the income figure for 2018-19 was highly
reliant on the performance of the Thorp reprocessing plant in its final year of operations. The impact
of volatility in Thorp output was more significant under IFRS 15 than under previous standards. The
Thorp plant concluded reprocessing operations during 2018-19 thereby removing this uncertainty
from future years.
In order to produce a consistent measurement of fulfillment of the remaining performance obligations
under the waste treatment elements of the respective spent fuel reprocessing contracts, NDA has
determined that the remaining revenue on overseas reprocessing contracts will be recognised over
the remainder of the period in which waste treatment services for all wastes produced by the Thorp
plant will be completed (currently expected to conclude in 2025). This means that the completion of
the programme will be treated as a single performance obligation under a single contract and as a
result there is a non-recurring impact on the contract loss provision on NDA’s Statements of Financial
Position. If NDA had not applied the portfolio approach to these contracts, revenue recognised in the
period would have been approximately £440 million higher than that reported. The revenue will instead
be recognised over the contract term, to the end of 2024-25.
During the year the NDA reviewed the revenue recognition basis of a legacy waste management
contract, and concluded that the performance obligations of the contract had been fulfilled and
therefore, given the NDA’s derogation to set aside the requirement to retrospectively restate revenues,
the remaining revenue could be recognised in the year, producing additional and non-recurring
revenue in the year of approximately £120 million. The revenue would otherwise have been recognised
over a long period of time at approximately £6 million per annum.
The first‑time implementation of IFRS15 by the NDA (excluding the non recurring item described
above) resulted in income recognised in the year being £44 million lower than the equivalent figure
which would have been recognised under previous accounting standards. The variance arises from
the different recognition profiles for the recognition of revenues for storage of wastes and products
and the storage and de-storage of revenues, in which proportionately less revenue is recognised in
the short term (and proportionately more in the medium to long term).
The prior period impact on the remaining non-NDA income stream is only £2.5 million. As a result,
there is no adjustment to opening balances.
Levy income
The Group’s levy income of £1,212 million (2017-18: £818 million) is comprised of Low Carbon
Contract Company Ltd (LCCC)’s operational costs levy of £980 million, Electricity Settlements
Company Ltd (ESC)’s settlement costs levy of £183 million, Oil and Gas Authority (OGA)’s petroleum
licences levy of £22 million, Financial Reporting Council (FRC)’s preparers levy of £17m and the
core Department’s levy of £10 million. Apart from FRC’s preparers levy, which is based on voluntary
contributions and accounted for on a cash receipts basis, the majority of the remaining levies arise
from regulations and legislation. They are typically set on an annual basis, invoiced quarterly or bi-
annually, and accounted for in the period to which the invoices are related. LCCC and ESC do not
prepare their individual accounts under FReM and have judged that IFRS 15 does not apply to income
from electricity suppliers. IFRS 15 is applicable to the Group’s levy income under FReM guidance.
There are no changes in the recognition and measurement of levy income under IFRS 15.
Fees, charges and recharges
The Group’s income from fees, charges and recharges is £250 million (2017-18: £466 million), of which
the most significant income is Insolvency Service’s administration fees of £79 million and Civil Nuclear
Police Authority’s income of £48 million. The adoption of IFRS 15 does not affect the recognition and
measurement of this income stream.
Grant income
The total grant income for 2018-19 is £262 million (2017-18: £138 million). Under the FReM grants
and grants-in-aid should be accounted for in accordance with IAS 20 ‘Accounting for Government

Annual report and accounts 2018-19
130
Grants and Disclosure of Government Assistance’ as interpreted by the Manual. The grant income is,
therefore, out of scope under IFRS 15.
Income from Mineworkers’ Pension Scheme
Income of £475 million (2017-18: £742 million) was recognised during 2018-19 relating to the
Government guarantee of certain benefits payable to members and beneficiaries of the Mineworkers’
Pension Scheme. The Government is entitled to a portion of any periodic valuation surpluses
determined by the Government Actuary following triennial valuations. The cash amounts are to be
received annually up to 2027. The Coal Pension receivables have been classified as held at amortised
cost under IFRS 9 ‘Financial Instruments’. The associated income, therefore, is out of scope of IFRS 15.
1.7
Applicable accounting standards issued but not yet adopted and FReM changes
for 2019-20
IFRS 16 ‘Leases’
IFRS 16 ‘Leases’ replaces IAS 17 ‘Leases’ and will be adopted by the public sector in 2020-21.
IFRS 16 represents a significant change in lessee accounting by removing the distinction between
operating leases (off-statement of financial position financing) and finance leases (on-statement of
financial position financing), and introducing a single lessee accounting model. IFRS 16 requires the
recognition of all leases as finance leases with exemption given to low value leases and short-term
leases, i.e. those with lease terms of less than 12 months. This will result in the recognition of a right-
to-use asset, measured at the present value of future lease payments, and a matching liability in the
Statement of Financial Position (SoFP). Disclosure of operating leases is included in note 21.2.1. The
Group is currently assessing the impacts of the IFRS 16 adoption.
1.8
Operating income
Operating income relates directly to the operating activities of the Group and includes income from
contracts with customers, levies, grants and income from the Mineworkers’ Pension scheme.
The Group is required to identify receipts which it collects on behalf of the Consolidated Fund;
these are not recognised as income but instead are disclosed in a separate Trust Statement
published alongside these accounts and in note 4 in the Statement of Parliamentary Supply in the
Accountability Report.
Operating income from contracts with customers
Income from contracts with customers are allocated to individual promises, or performance
obligations, on a stand-alone selling price basis, and is recognised when the related performance
obligation is satisfied, either over time or at a point in time. The performance obligations are typically
satisfied upon delivery of goods and services in accordance with the contractually defined timescales.
The payment terms for the invoices are typically 30 days. Where the Group receives consideration
prior to the transfer of goods and services, the amount is recorded as contract liabilities. Where the
Group has transferred goods and services to a customer and the right to consideration is conditioned
on something other than the passage of time, the amount is recorded as contract assets.
The measurement of income takes account of significant financing components, variable
consideration, any discounts or rebates.
Levies
Levy income is recognised in the Group accounts when an event has occurred that creates an
obligation on a counterparty to pay the levy, the amount can be reliably measured, and it is probable
that the assessed economic benefits from the taxable event will flow to the Group. Levies are typically
set on an annual basis, invoiced quarterly or bi-annually, and accounted for in the period to which the
invoices are related to and performance obligations are satisfied.
The Low Carbon Contracts Company Ltd (LCCC) and Electricity Supply Company Ltd are permitted
to retain levies collected under statute and classified as taxes in the national accounts. This income is
recognised by the companies in the same period as the related expenditure. The department is not

Financial Statements
131
permitted by the FReM to recognise tax income relating to future years, whereas LCCC, which does
not apply the FREM, is able to. Adjustments are made on consolidation to ensure compliance with the
Group accounting policy.
Grant income
Grant income including European Funding is recognised when there is reasonable assurance that
there are no conditions attached, or that any such conditions have been complied with and it is
certain the grant will be received. Research grants and fellowships are recognised in line with a
schedule of pre-agreed payment profiles, which include matching considerations over the period of
the grant duration and to the period which they relate. Where the terms and conditions do not specify
a pre- agreed payment profile or other matching considerations, obligations are recognised in full.
Where the profile indicates an unclaimed and/or unpaid amount exists at the reporting date, such
sums are accrued.
Income from the Mineworkers’ Pension scheme
Income arising from the Government guarantee of certain benefits payable to members and
beneficiaries of the Mineworkers’ Pension scheme is recognised when the core Department becomes
entitled to the income and the value can be reliably measured.
1.9
Staff costs
Staff costs are recognised as expenses when the Group becomes obligated to pay them, including
the cost of any untaken leave entitlement.
1.10 Grants payable
Grants payable are recognised when the grant recipient has performed the activity that creates
an entitlement to the grant under the terms of the scheme and include estimates for claims not
yet received. Grant contributions to international organisations in the form of promissory notes are
recognised as expenses when they become payable on demand with the department exercising no
further control over disbursement.
1.11 Taxation
The core Department and its executive agencies are exempt from corporation tax by way of Crown
exemption. Some consolidated bodies are subject to corporation tax on taxable profits. Current
tax assets and liabilities are measured at the amount expected to be recovered from or paid to HM
Revenue and Customs, based on tax rates and laws that are enacted or substantively enacted by the
reporting date.
Value Added Tax (VAT) is accounted for in the Accounts, in that the amounts are shown net of VAT
except for irrecoverable VAT, which is aggregated with the cost of purchased items.
Deferred taxation
Deferred tax is recognised on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets are
recognised for all tax-deductible temporary differences, carry forward of unused tax credits and
unused tax losses to the extent that it is probable that taxable profit will be available in future years
against which they can be utilised.
1.12 Property, plant and equipment (PPE)
Assets are capitalised as PPE if they are intended for use on a continuing basis and their original
carrying value, on an individual or asset pool basis, exceeds the relevant capitalisation threshold
which ranges from £1,000 to £10,000 across the Group. Exceptions are: a) assets held by the Nuclear
Decommissioning Authority on designated nuclear sites are only recognised where the economic
element of their value at the reporting date exceeds £100,000 and the proportion of asset value
relating to commercial activity exceeds 10%; and b) operational mine water schemes and subsidence
pumping stations are held by the Coal Authority at nil value because they are used to address
pollution caused by past mining activities where the economic benefits have already been received.

Annual report and accounts 2018-19
132
To the extent that it has been recognised as a provision under IAS 37, the estimated cost of
decommissioning facilities is recognised as part of the carrying value of the asset at initial recognition
and depreciated over its useful life.
Valuation of PPE
PPE is carried at fair value except for nuclear waste management assets held at historical cost (note
1.2) and assets under construction which are held at cost. In accordance with the FReM, assets that
have short useful lives or are of low value are carried at depreciated historical cost less impairment as
a proxy for fair value.
Non-specialist land and buildings are measured at current value in existing use using professional
valuations. Specialist land and buildings are measured at depreciated replacement cost which
represents the present value of the asset’s remaining service potential.
Revaluation of PPE
Any accumulated depreciation at the date of revaluation is eliminated and the resulting net value
restated to equal the revalued amount. Any revaluation increase arising is credited to the revaluation
reserve except to the extent that it reverses a revaluation decrease for the same asset previously
recognised as an expense in which case the increase is credited to Net expenditure for the year to
the extent of the decrease previously charged. A decrease in carrying amount arising on revaluation is
charged as an expense to the extent that it exceeds the balance, if any, held in the revaluation reserve
relating to a previous revaluation of that asset. On de-recognition, any revaluation surplus remaining in
the revaluation reserve attributable to the asset is transferred directly to the General Fund.
Depreciation of PPE
Apart from freehold and long leasehold land which are not depreciated, PPE assets are depreciated
to estimated residual values on a straight-line basis over the following estimated useful lives:
Freehold buildings
10 – 60 years
Leasehold land and buildings
10 – 60 years or remaining life of lease
Agricultural buildings
Up to 60 years
Dwellings
Up to 60 years
Leasehold improvements
Shorter of estimated remaining useful life or outstanding
term of lease
Computer equipment
2 – 10 years
Plant and machinery
3 – 50 years or remaining life of lease
Office machinery (included in plant and machinery),
furniture, fixtures and fittings
2 – 11 years or remaining life of lease
Transport equipment
2 – 14 years
Ships (included in transport equipment)
Minimum of 20 years
Aircraft (included in transport equipment)
Minimum of 15 years
Assets under construction
Not depreciated until available for use as intended by
management
Residual values and useful lives are reviewed and adjusted if appropriate at each reporting date.
1.13 Investment property
The Group holds a number of properties which have been classified as investment properties and are
measured using the fair value model specified in IAS 40. Gains and losses arising from changes in fair
value are recognised in Net expenditure for the year.
1.14 Intangible non-current assets
Intangible non-current assets are capitalised if they are intended for use on a continuing basis and
their original carrying value, on an individual or asset pool basis, exceeds the relevant capitalisation
threshold which ranges from £1,000 to £10,000 across the Group. There are no active markets for any

Financial Statements
133
of the Group’s intangible non-current assets which are valued at the lower of depreciated replacement
cost and value in use using a valuation technique (for example for income-generating assets); where
there is no value in use, depreciated replacement cost is used. Assets of low value or with short useful
lives are carried at cost less accumulated amortisation and impairment losses as a proxy for fair value.
They are amortised on a straight-line basis over the following periods:
Software licenses
3 – 10 years
Internally developed software
Up to 10 years
Website development costs
2 – 5 years
Patents, licenses and royalties
7 – 15 years
1.15 Impairment of PPE and intangible non-current assets
The Group reviews carrying amounts at each reporting date. If an indicator for impairment occurs
then the recoverable amount of the asset (the higher of fair value less costs to sell and value in use) is
estimated and an impairment loss recognised to the extent that it is lower than the carrying amount.
Losses arising from a clear consumption of economic benefit are charged to Net expenditure for the
year. Losses that do not result from a loss of economic value or service potential are taken to the
revaluation reserve to the extent that a revaluation reserve exists for the impaired asset; otherwise to
Net expenditure for the year.
1.16 Assets held for sale
Assets are classified as held for sale if their carrying amount will be recovered through a sale
transaction rather than through continuing use. This condition is regarded as met only when the sale
is highly probable, the asset is available for immediate sale in its present condition and the asset is
actively marketed for sale. Management must be committed to the sale which should be expected to
qualify for recognition as a completed sale within one year from the date of classification. Assets held
for sale are measured at the lower of a) carrying amount and b) fair value less costs to sell.
1.17 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and other short term highly liquid investments
which are readily convertible to known amounts of cash are subject to insignificant risk of changes in
value and have an original maturity of three months or less. Any bank overdraft amounts are included
within Trade payables and other liabilities
1.18 Leases
Leases are classified as finance leases when the risks and rewards of ownership are transferred
substantially to the lessee; all other leases are classified as operating leases.
Finance leases
Group as lessor
Amounts due from lessees under finance leases are recognised as receivables at the amount of
the Group’s net investment in the lease. Finance lease income is allocated to accounting periods so
as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect
of the leases.
Group as lessee
Assets subject to finance leases and the associated liabilities for future payments (if any) are
recognised in the SoFP.
Operating leases
Group as lessor
Assets subject to operating leases are recognised in the SoFP with rental income plus initial direct
costs incurred in arranging the lease, including incentives to the lessee to enter into the lease,
recognised on a straight-line basis over the lease term.

Annual report and accounts 2018-19
134
Group as lessee
Rentals payable under operating leases, including benefits received and receivable as incentives to
enter into the leases, are expensed on a straight-line basis over the term of the lease.
1.19 Subsidiaries, associates and joint ventures
Subsidiaries and public sector joint ventures are consolidated where designated within the
Departmental Group boundary (note 28); those outside the Departmental boundary are measured in
accordance with IFRS 9. Equity investments in associates or joint ventures outside the public sector
are initially recorded at cost and subsequently adjusted to reflect the Group’s share of net profit or
loss of the associate or joint venture.
1.20 Financial instruments
Financial assets and liabilities are measured initially at fair value plus transaction costs unless carried
at fair value through profit or loss in which case transaction costs are charged to Net expenditure
for the year. Fair value is determined by reference to quoted prices where an active market exists for
the instrument; otherwise it is determined using generally accepted valuation techniques including
discounted estimated cash flows. A regular way purchase or sale of financial assets shall be
recognised and derecognised, as applicable, using settlement date accounting.
Financial assets
Financial assets are derecognised when the rights to receive future cash flows have expired or are
transferred and the risks and rewards of ownership have been substantially transferred.
Categories of financial asset
Financial assets are categorised as one of the following:
• Amortised cost are financial assets whose cash flows are the solely payments of principal and
interests and the business model of which is to hold for collecting contractual cash flows only.
They are initially recognised at fair value and thereafter at amortised cost using the effective interest
method less any impairment. The effective interest rate method is a method of calculating the
amortised cost of a financial asset and of allocating interest income over the relevant period.
• Fair value through Other Comprehensive Income (FVOCI) are either:
(i) debt instruments whose cash flows are the solely payments of principal and interests and the
business model of which is to hold for both collecting contractual cash flows and selling.
(j) equity instruments that are neither held for trading nor contingent consideration recognised in
a business combination, as the Departmental Group has made an irrevocable election at initial
recognition.
After initial recognition, these assets are subsequently carried at fair value. Gains and losses in fair
value are recognised directly in equity. On de-recognition, the cumulative gain or loss previously
recognised in equity is recognised in Net expenditure for the year for debt instruments and
transferred to General Fund for equity instruments.
• Fair value through profit or loss (FVTPL) are any financial assets that are not measured at amortised
cost or FVOCI. Transaction costs and any subsequent movements in the valuation of the asset are
recognised in Net expenditure for the year.
Impairment of financial assets
Financial assets other than equity instruments and those at FVTPL are assessed for impairment at
each reporting date using the expected credit loss (ECL) model. The three-stage model based on the
level of credit risk is applied to any financial assets other than long term trade receivables, contract
assets which do contain a significant financing component and lease receivables within the scope of
IAS 17 as follows:
• For financial assets with low credit risk or assets that have not had a significant increase in credit
risk since initial recognition, 12-month ECL are recognised and interest revenue is calculated on the
gross carrying amount of the asset without the reduction of credit allowance.

Financial Statements
135
• For financial assets that have had a significant increase in credit risk since initial recognition but that
do not have objective evidence of impairment, lifetime ECL are recognised and interest revenue is
calculated on the gross carrying amount of the asset.
• For financial assets that have objective evidence of impairment at the reporting date, lifetime
ECL are recognised and interest revenue is calculated on the net carrying amount net of
credit allowance.
Impairment gains or losses, the amount of expected credit losses (or reversal) that is required to
adjust the loss allowance at the reporting date to the amount that is required to be recognised in
accordance with the Standard, are recognised in profit or loss.
For long term trade receivables, contract assets which do not contain a significant financing
component and lease receivables within the scope of IAS 17 ‘Leases’, the simplified approach is
applied and lifetime ECL are recognised as dictated by the FReM.
Financial liabilities
Financial liabilities are derecognised when the obligation is discharged, cancelled or expires.
The Group’s financial liabilities excluding derivatives are initially recognised at fair value including
directly attributable transaction costs, and subsequently at amortised cost using the effective
interest rate method.
Derivative financial instruments
Derivatives are initially recognised at fair value and subsequently at fair value. Gains/losses in fair value
are recognised in Net expenditure for the year unless hedge accounting is applied.
The Group has two classes of derivative financial instrument, foreign exchange contracts to which
hedge accounting is applied and Contracts for Difference to which hedge accounting is not applied.
Forward foreign exchange contracts
Forward contracts are held as cash flow hedges to reduce exposure to foreign currency risk. The
effective portions of changes in their fair values are recognised in equity. Gains and losses relating to
ineffective portions are recognised immediately in Net expenditure for the year. Amounts accumulated
in equity are recycled to Net expenditure for the year in the same period as the hedged item.
Contracts for Difference (CfDs)
CfDs are held to incentivise investment in low carbon electricity generation by agreeing strike prices
with electricity generators which are counterparties to the contracts. The counterparty pays or is paid
the difference between the strike price and the reference price (a measure of the average market price
of electricity) at the time of electricity supply. CfDs are measured at FVTPL, initially at their transaction
price (£nil) with subsequent changes in fair value (as measured by a valuation model) recognised
in Net expenditure for the year along with amortisation over the contracts settlement period of the
difference between the transaction price and the valuation model estimate of fair value at initial
recognition which is usually different from the transaction price. Where the valuation model estimate
of fair value at initial recognition is different from the transaction price, the difference is deferred and
amortised to Net expenditure for the year over the contract settlement period (note 9).
1.21 Financial guarantees and loan commitments
Financial guarantee contract liabilities
Financial guarantees are initially recognised at fair value on the date the guarantee was given and
subsequently re-measured at the higher of a) the amount of loss allowance determined in accordance
with IFRS 9 ‘Financial Instruments’ and b) the amount initially recognised less when appropriate,
cumulative amortisation in accordance with IFRS 15 ‘Revenue from Contracts with Customers’.

Annual report and accounts 2018-19
136
Loan commitments at below market rate
The Group accepts a lower than market rate of return from Enterprise Capital Fund investments in
order to encourage private sector investors to invest alongside. Although the Group expects to make
a positive return from these investments, this return is less than that required by the private sector.
The Group has at initial recognition elected to irrevocably designate the liability related to these
loan commitments as measured at fair value through profit or loss because the group of financial
assets and financial liabilities is managed, and its performance is evaluated on a fair value basis, in
accordance with a documented investment strategy, and information is provided internally on that
basis to the key management personnel.
1.22 Pensions
The accounting for each of the Departmental Group’s pension plans is dependent on its nature.
Funded defined-benefit pension schemes
The Group has nine funded defined-benefit pension schemes: the UKRI’s Medical Research Council
Pension Scheme (MRCPS), two schemes through the NDA and six others through the nuclear site
licence companies.
The net liabilities recognised in the Statement of Financial Position for funded defined benefit schemes
are calculated by independent actuaries by deducting the fair value of scheme assets (at bid prices)
from the present value of defined benefit obligations (estimated using the projected unit credit method,
less any amounts receivable from third parties). Where the scheme is in surplus, the asset recognised
in these statements is limited to the present value of benefits available from future refunds from the
plan, reductions in future contributions to the plan or on settlement of the plan and takes into account
the adverse effect of any minimum funding requirements. Actuarial gains and losses are recognised
as Other Comprehensive Income and Expenditure except for site licence companies where they are
included in provision expense relating to the Nuclear Decommissioning Provision.
Unfunded defined benefit pension schemes
The Group contributes towards a number of unfunded defined benefit pension schemes of which
employees are members: these include the Principal Civil Service Pension Scheme, the Civil Servant
and Other Pension Scheme, the Combined Pension Scheme of the UK Atomic Energy Authority.
The participating employers in these schemes are unable to identify their share of the underlying net
liability; as such these schemes are accounted for as defined contribution pension schemes, with
employers contributions charged to the SoCNE in the period to which they relate. Further information
regarding PCSPS and CSPOS is presented in the Staff Report.
Defined contribution pension schemes
Contributions are charged to the SoCNE when they become payable. The Group has no further
liabilities in respect of benefits to be paid to members.
More information about the Group’s pension schemes can be found in the accounts of
the consolidated entities, including in note 3 for the core Department, and of the pension
schemes themselves.

Financial Statements
137
1.23 Provisions
A provision is recognised when it is probable that an outflow of economic benefits will be required to
settle a present obligation (legal or constructive) that can be reliably measured and which results from
a past event. Where the time value of money is material the provision is measured at present value
using discount rates prescribed by HM Treasury. Previously HM Treasury issued real rates based
upon the real yield of UK index-linked gilts. From 2018-19 onwards, HM Treasury is issuing nominal
rates that do not take account of inflation, unlike real rates. Using these nominal rates, the cash
flows are inflated using the following inflation rates provided by HM Treasury except where a more
appropriate forecast has been identified for specific provisions:
31 March 2019
31 March 2018
Nominal discount
rate
Inflation rate
Equivalent real
discount rate
Real discount
rate
Cash outflows expected within two
years
0.76%
2.0%
(1.22%)
(2.42%)
Cash outflows expected between two
and five years
0.76%
2.1%
(1.31%)
(2.42%)
Cash outflows expected between five
and ten years
1.14%
2.1%
(0.94%)
(1.85%)
Cash outflows expected after ten years
1.99%
2.1%
(0.11%)
(1.56%)
Nuclear decommissioning provisions
Where expenditure in settlement of a provision is expected to be recovered from a third party, the
recoverable amount is treated as a separate asset (note 12 Recoverable contract costs). Provision
charges in the SoCNE are shown net of changes in these recoverable amounts.
1.24 Contingent assets and liabilities
Where an outflow of economic benefits from a past event is possible but not probable, the
department discloses a contingent liability. In addition to contingent liabilities disclosed in these
financial statements in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent
Assets, certain statutory and non-statutory contingent liabilities where the likelihood of a transfer of
economic benefit is remote are disclosed in the Accountability Report for Parliamentary reporting and
accountability purposes.
Where an inflow of economic benefits from a past event is probable, the Group discloses a contingent
asset. Estimates of the financial effects are disclosed where practicable; where the time value of
money is material, contingent liabilities and assets are stated at discounted amounts and the amount
reported to Parliament separately noted. Remote contingent liabilities reported in the Accountability
Report are stated at the amounts reported to Parliament.
1.25 Third party assets
The Group holds, as custodian or trustee, certain cash balances belonging to third parties. These
balances are not recognised in the financial statements since neither the Group nor Government more
generally has a direct beneficial interest in them.
1.26 Judgements, estimates and assumptions
Preparation of financial statements requires management to make judgements, estimates and
assumptions based on experience and expected events that affect the reported amounts of assets
and liabilities, income and expenditure. Key accounting judgements applied in these statements are
described below.
Judgements
Hinkley Point C (note 9)
In accordance with the IFRS Conceptual Framework - Hinkley Point C Contract for Difference
(CfD) liability has not been recognised in these financial statements. This is due to the unavoidable

Annual report and accounts 2018-19
138
uncertainties in creating a fair value estimate for HPC CfD due to the duration of the contract and
lack of reliable independent estimates or readily available forecasts of wholesale electricity prices
beyond 2040. Reliability is defined as using information that is complete, neutral and free from error.
This means that a condition of the Conceptual Framework, that an item is recognised in the financial
statements when the item has a cost or value that can be measured with reliability, is not met.
Estimates
In accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, revisions
to accounting estimates are recognised prospectively. Revisions of the estimates and assumptions
below could cause material adjustment to the carrying amounts of assets and liabilities within the next
financial year.
Income recognition (note 6.1)
A number of significant accounting judgements have been performed to apply IFRS 15 to
the recognition of revenue and costs from contracts with customers held by the Nuclear
Decommissioning Authority (NDA), including the determination of transaction price of each contract,
the allocation of transaction price to each performance obligation, the timing of satisfaction of
performance obligations, and the accounting treatment of contract costs. Detail is included in NDA’s
financial statements.
Useful lives of non-current assets
There is uncertainty in relation to estimated useful lives of non-current assets; these are reviewed as
at the reporting date and updated if expectations differ from previous estimates due to physical wear
and tear, technical or commercial obsolescence or legal or other limits on their use.
Impairment of assets (note 4.2, 7, 8, 10, 11, 13, 14, 16, and 23)
Impairment of non-financial assets is measured by comparing the carrying value of the asset or cash
generating unit with management’s estimate of its recoverable amount. Impairment of financial assets
is measured using the expected credit loss model (note 1.20)
Fair value of Repayable Launch Investments (note 11.1)
The econometric model used to estimate future cash flows from Repayable Launch Investments
includes a number of assumptions including on future economic growth.
Fair value of private equity investments (note 11.2)
A range of valuation techniques are used for private equity investments, including discounted cash
flows and net asset values.
Redundancy Payments Service receivable (note 14)
There is uncertainty in the estimate of the amount to be realised by the Insolvency Service from sale
of assets of insolvent employers.
CfD contracts (note 9)
The significant uncertainties affecting measurement of Financial Investment Decision Enabling
for Renewables (FIDeR) and CfD contracts, which facilitate investment in low-carbon electricity
generation, are described in the note.
Fair value of financial guarantees (note 20)
Fluctuations in the fair value of financial guarantees measured using modelling techniques.
Provisions (note 19)
Provision discount rates set by HM Treasury are updated annually and have a material effect
on liabilities There are other significant uncertainties in relation to measurement of the liabilities
reported in note 19, in particular in relation to future decommissioning costs to be incurred by the
UK Atomic Energy Authority, Nuclear Decommissioning Authority and Coal Authority, which are
described in the note.

Financial Statements
139
1.27 Prior Period Adjustments
In accordance with the FReM, where a prior period adjustment is identified as a result of an error,
the Departmental Group will correct all material prior period errors retrospectively in the first set of
financial statements authorised for issued after their discovery by:
• Restating the comparative amounts for the prior periods presented in which the error occurred;
• If the error occurred before the earliest prior period presented, restating the opening balances of
assets, liabilities and equity for the earliest prior period presented.
However, if it is impracticable to determine the period-specific effects of an error on comparative
information for one or more prior periods presented, the Departmental Group will restate the opening
balances of assets, liabilities and equity for the earliest period for which retrospective restatement
is practicable.
The option to adopt retrospectively has been removed by the FReM for IFRS 9 ‘Financial Instruments’
and IFRS 15 ‘Revenue from Contracts with Customers’, therefore, no restatement of 31 March 2018
has been made for the adoption of these new accounting standards.
The prior period adjustments and their impact on the comparative amounts for the prior periods are
detailed in note 27.
2 Reporting by operating segment
In accordance with the relevant reporting requirements, including IFRS 8, the Statement of
Parliamentary Supply and supporting notes reflect net resource and capital outturn in line with the
control totals voted by Parliament. The figures within SoPS 1.1 provide the income and expenditure
totals associated with key business activities within the Departmental Group and therefore reflect the
management information reporting to the Board during the period.
3 Staff costs
Staff costs comprise:
2018-19
2017-18
Permanently
employed staff
Others
Total
Total
£m
£m
£m
£m
Wages and salaries
785
70
855
779
Social security costs
86
-
86
81
Other pension costs
179
-
179
168
Sub total
1,050
70
1,120
1,028
Less recoveries in
respect of outward
secondments
(1)
-
(1)
(3)
Total net costs
1,049
70
1,119
1,025
Of which:
Core Department
and Agencies
309
21
330
273
NDPBs and other
designated bodies
740
49
789
752
Total net costs
1,049
70
1,119
1,025
For further information on staff costs and numbers, please see the Staff Report and the Remuneration
Report which includes staff costs for nuclear site licence companies which are not included in
the table above.

Annual report and accounts 2018-19
140
4 Operating expenditure
4.1
Purchase of goods and services
2018-19
2017-18 restated
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Rentals under operating leases
30
47
43
58
Accommodation and office equipment costs
42
218
50
202
Legal, professional and consultancy costs
142
288
101
199
Finance, HR, IT and support costs
110
127
102
120
Training and other staff costs
10
28
11
32
Travel and subsistence costs
11
55
8
51
Advertising and publicity
3
18
2
15
Programme management and administration
of grants and awards
40
175
37
206
Capacity Market payments
-
176
-
224
Professional and international subscriptions
283
516
317
567
Enforcement costs of employment related
policies
30
30
27
27
Donations
-
16
-
9
Funding Paternity, Adoption and Shared
Parental Leave policy
79
79
7
7
Purchase of geographical and scientific
equipment
-
46
-
51
Purchase of weather information and weather
related services
108
108
99
99
Redundancy payments service
320
320
260
260
Sponsorship costs
2
3
-
1
Payment of taxes and levies
-
169
-
4
Subsidy to Post Office Limited
62
62
95
95
Energy intensive industries subsidies
141
141
302
302
Other purchase of goods and services cost
11
321
81
288
Total
1,424
2,943
1,542
2,817
Purchase of goods and services
Core Department
Included within Other purchase of goods and services costs for 2017-18 was £60 million of costs
in relation to special payments; these were one-off payments and there is no corresponding cost
in 2018-19. See the Losses and special payments disclosure in the Accountability Report for
further details.

Financial Statements
141
Audit fees
Audit fees are included under the heading ‘Legal, professional and consultancy costs’.
During the year the core Department did not purchase any non-audit services from its auditor,
the National Audit Office. The non-cash auditors’ remuneration of £625,570 (2017-18: £655,750)
comprises £570,000 (2017-18: £600,000) for the cost of the audit of the Departmental Group, £20,000
(2017-18: £20,000) for the Trust Statement, and £35,750 (2017-18: £35,750) for the audit of the UK
Atomic Energy Authority Pension Scheme Accounts.
Agencies
During the year the Agencies did not purchase any non-audit services from their auditor, the National
Audit Office. Details of the non-cash auditors’ remuneration of £152,000 (2017-18: £131,000) can be
found in the accounts of the individual agencies.
NDPBs and other designated bodies
The cash remuneration of £2,287,880 (2017-18: £2,353,105) relates to the statutory audit of NDPBs
and other designated bodies. Of this amount, £1,955,291 (2017-18: £1,943,700) was payable to the
NAO and £332,589 (2017-18 restated: £409,405) was payable to auditors other than the NAO.
In 2018-19, £nil was payable to the NAO (2017-18: £nil) and £127,546 was payable to auditors other
than the NAO (2017-18: £123,079) for non-audit services. Further details can be obtained from the
accounts of the NDPBs and other designated bodies.
Redundancy Payments Service
From 1 April 2018, the responsibility for the Redundancy Payment Service (RPS) transferred from
the core Department to the Insolvency Service (INSS). This was accounted for in accordance with
the FReM as a Transfer by Absorption. Each entity accounts for the transfer at the carrying value
of the assets and/or liabilities transferred at the date of transfer. No fair value adjustment is made to
the assets and/or liabilities transferred and the comparatives for the core Department and INSS are
not restated.
INSS, an executive agency of the department, is responsible for the approval and processing of
claims under the Redundancy Payment Service (RPS), which is financed from the National Insurance
Fund. Redundancy payments are made from the National Insurance Fund to employees whose
employers have failed to make payments due or who were insolvent.
The Insolvency Service has a service level agreement with HM Revenue and Customs. Claims
processed fall into two categories:
• RP1 (which covers redundancy pay, holiday pay and arrears of pay).
• RP2 (pay in lieu of notice).
There is associated income arising from two sources:
• Solvent Recovery – where money is recovered from solvent employers to meet the costs of
redundancy payments made by the RPS.
• Insolvent Recovery – INSS becomes a creditor receiving a dividend if there are sufficient funds in
the insolvency of the employer.
Expenditure in respect of RPS in 2018-19 totalled £320 million (2017-18: £292 million) against income
of £nil (2017-18: £32 million). The net amount totalled £320 million (2017-18: £260 million). The 2017-18
comparatives before the transfer were recognised in the core Department.
Payments of taxes and levies
During 2018-19, UK Research and Innovation (UKRI) was required to pay corporation tax on the
chargeable gain arising on the transfer of assets from the predecessor Research Councils into UKRI.
The total value of this payment was £143m.

Annual report and accounts 2018-19
142
4.2
Depreciation and impairment charges
2018-19
2017-18
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Amortisation of recoverable contract costs
-
166
-
227
Depreciation
18
256
20
257
Amortisation
2
45
2
26
Impairment of property, plant and equipment
2
59
2
48
Impairment of investments
33
81
67
108
Total
55
607
91
666
4.3
Provision expense
2018-19
2017-18
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Increase/(decrease) in nuclear provisions due
to changes in discount rate
(37)
(95,984)
(17)
70,985
Increase/(decrease) in other provisions due to
changes in discount rate
(127)
(2,799)
47
1,594
Other provision movements excluding bad
debt provisions and financial guarantee
liabilities
210
1,057
148
2,850
Total increase/(decrease) in provisions
excluding bad debt provisions and
financial guarantee liabilities
46
(97,726)
178
75,429
Total increase/(decrease) in bad debt
provisions
1
1
3
3
Total increase/(decrease) in financial
guarantee liabilities
12
4
1
1
Total
59
(97,721)
182
75,433
The significant decrease in the provision expense was primarily driven by the change in discount rate.
Further detail of the movements in provisions can be found in note 19.1 for Nuclear Provisions and
note 19.2 for Other Provisions.

Financial Statements
143
4.4
Grants
2018-19
2017-18
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Research and development
31
49
101
115
Grant in aid
10,977
-
10,193
-
Post Office network reform
168
168
45
45
Market frameworks
71
71
63
63
Science and research
465
6,309
363
5,695
International Climate Fund
244
247
307
311
Global threat reduction programmes
2
2
11
11
Renewable Heat Incentive
818
818
687
687
Innovation programmes
128
613
136
667
Energy Markets and Consumers
3
3
9
8
Heat infrastructure team progammes
(4)
(4)
9
9
Other grants
4
4
11
(66)
Total
12,907
8,280
11,935
7,545
4.5
Other operating expenditure
2018-19
2017-18
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Profit on disposal of investments and minority
interest
1
(41)
3
(72)
Revaluations of investments and specific bad
debt write offs
(5)
(4)
(9)
(17)
Total
(4)
(45)
(6)
(89)
The profit on disposal of financial assets mandatorily measured at fair value through profit or loss
during the financial year is £42 million. The core Department does not hold any financial assets
designated at fair value through profit or loss.

Annual report and accounts 2018-19
144
5 Finance expense
2018-19
2017-18
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Change in fair value - financial assets
(214)
(229)
4
28
Net loss on foreign exchange
-
2
-
4
Unrealised foreign exchange rate losses
2
1
2
3
Bank charges
-
1
1
1
Interest payable
-
33
-
27
Expected return on funded pension scheme
assets
-
(41)
-
-
Interest on pension liabilities
-
38
-
37
Borrowing costs on provisions
(37)
(3,660)
(26)
(1,306)
Total
(249)
(3,855)
(19)
(1,206)
The impact of HM Treasury-prescribed negative discount rates for provisions in 2017-18 was to
increase undiscounted liabilities for the Departmental Group, the unwinding of which gave rise to a
negative expense for borrowing costs on provisions. From 2018-19 onwards HMT is issuing positive
nominal rates and inflation rates, however the resulting real discount rates remain negative in 2018-19
(but less significantly that in 2017-18), leading to a negative expense for borrowing costs on provisions.
6 Income
6.1
Operating income
2018-19
2017-18
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Income from sales of goods and
services:
Income from contracts with customers
Fees, charges and recharges to/from
external customers and central Government
organisations
139
250
146
466
Levy income
10
1,212
9
818
Sales of goods and services
11
936
12
955
Miscellaneous income
8
99
9
96
Other income
European Union funding
4
26
2
24
Current grants and capital grants
102
262
1
138
Coal pension receipts
475
475
742
742
Venture capital and repayable launch
investment income
-
-
102
102
Total operating income
749
3,260
1,023
3,341
Income of £475 million was recognised in 2018-19 (2017-18 £742 million) in relation to an additional
sum receivable from the September 2017 valuation of the Mineworkers’ Pension Scheme. Further
detail of the Coal Pensions receivables is disclosed in note 14.

Financial Statements
145
The most significant contracts of the Departmental Group are held by the Nuclear Decommissioning
Authority (NDA). The table below shows the main types of contract, the main areas of performance
obligations therein, and for each category:
• the revenue recognised in the reporting period [A]
• the revenue expected to be recognised in future reporting periods (being the aggregate amount
allocation to performance obligations that are wholly or partially unsatisfied at the reporting date) [B]
• an indication of when NDA expects to recognise the remaining contract price
Contract type
Categories of performance
obligation
[A]
[B]
Of which £m:
£m
£m
2020-
2025
2026-
2038
2039-
2087
Spent fuel reprocessing
and associated waste
management
Receipt of spent fuel
30
-
-
-
-
Spent fuel reprocessing
140
-
-
-
-
Spent fuel storage
10
709
63
135
511
Interim storage of wastes
83
496
496
-
-
Treatment of wastes
62
370
370
-
-
Storage of treated wastes
4
174
24
51
99
Storage of products
17
844
100
216
528
Spent fuel receipts
Receipt of spent fuel
226
4,421
1,869
2,552
-
Other storage contracts
Storage of materials
55
1,161
422
536
203
Storage and destorage of
residues
Storage
2
4
4
-
-
Destorage
2
32
32
-
-
Waste substitution
Destorage
-
70
70
-
-
Legacy waste management
134
178
178
Total
765
8,459
3,628
3,490
1,341
The remaining revenue to be recognised in future reporting periods comprises:
• Payments from customers made on account
• Expected remaining future payments from customers

Annual report and accounts 2018-19
146
6.2
Finance income
2018-19
2017-18
Note
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Effective interest for Repayable launch
investments and other assets under IAS
39
11.1
-
-
39
39
Effective interest for other assets under
IAS 39
-
-
12
38
Dividend and interest income under IAS
39
-
-
133
273
Effective Interest for FVTPL assets
30
30
-
-
Effective Interest for amortised cost
assets
36
36
-
-
Interest income for amortised cost assets
10
74
-
-
Interest income for FVTPL assets
7
63
-
-
Dividend income for FVTPL assets held
at the period end
-
3
-
-
Dividend income from investments in
joint ventures, associates and public
dividend capital
131
45
-
-
Total
214
251
184
350
In 2018-19 the core Department recognised dividend income of £131 million (2017-18: £121 million).
This includes a dividend of £87 million from Enrichment Holdings Limited (EHL) (2017-18: £88 million).
In 2018-19 the Departmental Group received dividend income of £48 million (2017-18: £124 million).
The dividend from URENCO is no longer recognised as finance income because, following the IFRS
9 implementation assessment, URENCO has been reclassified from an investment accounted for
under IAS 39/IFRS 9 to an associate under IAS 28 - as the department has reassessed whether it has
significant influence over URENCO and concluded that it does, this has been treated as an in year
reclassification. As an associate, the department’s investment in URENCO through EHL is accounted
for using the equity accounting method. This results in the department recognising its share of
URENCO’s profits for the year in Other operating expenditure, £151 million in 2018-19, rather than the
dividend from EHL (2017-18: £88 million) and a fair value movement in the investment recognised in
Other Comprehensive income.

Financial Statements
147
7 Property, plant and equipment
Departmental Group 2018-19
Land
Buildings
Dwellings
Leasehold
Improvements
Information
Technology
Plant and
Machinery
Furniture,
Fixtures
and
Fittings
Transport
Equipment
Assets under
Construction
Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Cost or valuation
Balance at 1 April 2018
303
4,055
40
74
232
6,208
18
324
506
11,760
Additions
4
2
-
2
6
32
4
4
258
312
Disposals
-
(1,842)
-
(13)
(8)
(122)
(1)
(2)
-
(1,988)
Impairments
(41)
(7)
-
-
-
3
-
(6)
-
(51)
Transfers in/(out) of boundary
-
(4)
-
(12)
(2)
-
-
-
3
(15)
Reclassifications
-
71
-
5
28
73
1
5
(195)
(12)
Revaluations
(23)
196
1
-
1
10
-
3
10
198
At 31 March 2019
243
2,471
41
56
257
6,204
22
328
582
10,204
Depreciation
Balance at 1 April 2018
-
(2,749)
-
(42)
(171)
(5,177)
(12)
(195)
-
(8,346)
Charged in year
-
(56)
(1)
(7)
(29)
(142)
(2)
(19)
-
(256)
Disposals
-
1,839
-
13
8
121
1
2
-
1,984
Impairments
-
-
-
(1)
-
(7)
-
-
-
(8)
Transfers (in)/out of boundary
-
-
-
5
1
-
-
-
-
6
Reclassifications
-
-
-
-
-
1
-
(1)
-
-
Revaluations
(7)
(34)
1
-
-
(3)
-
(8)
-
(51)
At 31 March 2019
(7)
(1,000)
-
(32)
(191)
(5,207)
(13)
(221)
-
(6,671)
Carrying amount at
31 March 2019
236
1,471
41
24
66
997
9
107
582
3,533
Carrying amount at
1 April 2018
303
1,306
40
32
61
1,031
6
129
506
3,414
Asset financing:
Owned
211
1,471
41
24
64
997
9
107
582
3,506
Finance leased
25
-
-
-
-
-
-
-
-
25
On balance sheet (SoFP) PFI
and other service concession
arrangements
-
-
-
-
2
-
-
-
-
2

Annual report and accounts 2018-19
148
Departmental Group 2018-19
Land
Buildings
Dwellings
Leasehold
Improvements
Information
Technology
Plant and
Machinery
Furniture,
Fixtures
and
Fittings
Transport
Equipment
Assets under
Construction
Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Carrying amount at
31 March 2019
236
1,471
41
24
66
997
9
107
582
3,533
Of the total:
Core Department and Agencies
18
98
-
20
5
81
2
-
70
294
NDPBs and other designated
bodies
218
1,373
41
4
61
916
7
107
512
3,239
Carrying amount at
31 March 2019
236
1,471
41
24
66
997
9
107
582
3,533
Departmental Group 2017-18
Land
Buildings
Dwellings
Leasehold
Improvements
Information
Technology
Plant and
Machinery
Furniture,
Fixtures
and
Fittings
Transport
Equipment
Assets under
Construction
Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Cost or valuation
Balance at 1 April 2017
374
4,110
39
72
210
6,057
20
326
462
11,670
Additions
-
28
-
2
9
31
1
5
277
353
Disposals
(64)
(142)
-
(3)
(15)
(42)
(4)
(5)
(1)
(276)
Impairments
-
(2)
-
-
(2)
(8)
-
-
(32)
(44)
Transfers in/(out) of boundary
-
(1)
-
-
(2)
-
2
-
1
-
Reclassifications
-
22
-
3
27
151
(1)
1
(205)
(2)
Revaluations
(7)
40
1
-
5
19
-
(3)
4
59
At 31 March 2018
303
4,055
40
74
232
6,208
18
324
506
11,760
Depreciation
Balance at 1 April 2017
-
(2,816)
-
(37)
(149)
(5,051)
(13)
(182)
-
(8,248)
Charged in year
-
(52)
(1)
(7)
(31)
(146)
(2)
(20)
-
(259)
Disposals
-
116
-
2
13
34
3
4
-
172
Impairments
-
-
-
-
-
(4)
-
-
-
(4)
Reclassifications
-
(1)
-
-
(1)
2
-
-
-
-
Revaluations
-
4
1
-
(3)
(12)
-
3
-
(7)

Financial Statements
149
Departmental Group 2017-18
Land
Buildings
Dwellings
Leasehold
Improvements
Information
Technology
Plant and
Machinery
Furniture,
Fixtures
and
Fittings
Transport
Equipment
Assets under
Construction
Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
At 31 March 2018
-
(2,749)
-
(42)
(171)
(5,177)
(12)
(195)
-
(8,346)
Carrying amount at
31 March 2018
303
1,306
40
32
61
1,031
6
129
506
3,414
Carrying amount at 1 April 2017
374
1,294
39
35
61
1,006
7
144
462
3,422
Asset financing:
Owned
291
1,306
40
32
58
1,031
6
123
506
3,393
Finance leased
12
-
-
-
-
-
-
6
-
18
On balance sheet (SoFP) PFI
and other service concession
arrangements
-
-
-
-
3
-
-
-
-
3
Carrying amount at
31 March 2018
303
1,306
40
32
61
1,031
6
129
506
3,414
Of the total:
Core Department and Agencies
18
93
-
29
2
75
1
-
58
276
NDPBs and other designated
bodies
285
1,213
40
3
59
956
5
129
448
3,138
Carrying amount at
31 March 2018
303
1,306
40
32
61
1,031
6
129
506
3,414

Annual report and accounts 2018-19
150
Property, plant, and equipment (PPE) held by the Departmental Group
The professional valuations of land and buildings undertaken within the Departmental Group were
prepared in accordance with the Royal Institute of Chartered Surveyors (RICS) Valuation Standards
(6th Edition), the ‘Red Book’. Unless otherwise stated, land and buildings are professionally revalued
every five years and where appropriate in the intervening period, relevant indices are used. The most
significant land and buildings at 31 March 2019 were held by Nuclear Decommissioning Authority
(NDA) and UK Research and Innovation (UKRI). Revaluations were conducted by Avison Young Ltd
Chartered Surveyors and Powis Hughes Ltd Chartered Surveyors (for UKRI), and Avison Young Ltd
Chartered Surveyors (for NDA).
During the year NDA eliminated fully depreciated assets no longer performing commercial activity,
which had a gross book value and accumulated depreciation of £1,939 million. The assets included
the Thorp reprocessing plant and associated buildings and plant and equipment which no longer
perform commercial activity following the cessation of reprocessing during the year.
In accordance with the FReM the majority of Leasehold improvements, Information Technology,
Furniture, Fixtures and Fittings and Plant and Machinery are held at depreciated historic cost as
a proxy for fair value as the assets have short useful lives or low values. Land, Freehold Buildings,
Dwellings, Transport Equipment and the remainder of Plant and Machinery are held at fair value
based on professional valuations.
Within the Departmental Group, a variety of valuation techniques are used depending upon whether
the PPE asset is a specialised asset or a non-specialised asset. Where the PPE asset is a specialised
asset, then a depreciated replacement cost valuation is used, for example by scientific institutes.
Where the PPE asset is a non-specialised asset, then an existing-use valuation is used, for example
for land and office buildings. Depreciated replacement cost (DRC) valuations are based on a number
of unobservable inputs; these would be classified as level 3 in accordance with IFRS 13. Existing-use
value (EUV) valuations are based on a number of market corroborated but unobservable inputs e.g.
land valuations are based on similar prices per hectare adjusted for the specific location of the land,
whilst other EUV valuations use specific unobservable inputs, e.g. rental yields. The EUV valuations
inputs are classified as level 2 and level 3 in accordance with IFRS 13.
The Departmental Group does not hold any material individual PPE assets. Therefore there are no
individually material level 3 assumptions included in the overall Departmental Group fair value of PPE.
For there to be a material movement in the fair value of PPE, this would require a significant increase
in a number of level 3 valuation assumptions across the Departmental Group. This is unlikely, given
that the fair value movement in PPE in 2018-19 was £147 million (2017-18: £52 million).
Further information can be found in the financial statements of the individual bodies’ accounts.

Financial Statements
151
8 Intangible assets
Departmental Group
2018-19
Information
Technology
Software
Licences
Websites
Patents
Assets under
Construction
Total
£m
£m
£m
£m
£m
£m
Cost or Valuation
Balance at 1 April 2018
152
72
1
297
7
529
Additions
2
1
-
-
33
36
Disposals
-
(2)
-
-
-
(2)
Reclassifications
1
24
-
-
(13)
12
Transfers in/(out)
2
2
-
-
(3)
1
Revaluations
-
-
-
21
-
21
At 31 March 2019
157
97
1
318
24
597
Amortisation
Balance at 1 April 2018
(114)
(34)
(1)
(235)
-
(384)
Charged in year
(13)
(19)
-
(13)
-
(45)
Disposals
-
1
-
-
-
1
Transfers in/(out)
-
(2)
-
-
-
(2)
At 31 March 2019
(127)
(54)
(1)
(248)
-
(430)
Carrying amount at
31 March 2019
30
43
-
70
24
167
Carrying amount at
1 April 2018
38
38
-
62
7
145
Asset financing:
Owned
30
43
-
70
24
167
Carrying amount at
31 March 2019
30
43
-
70
24
167
Of the total:
Core Department and
Agencies
4
2
-
-
8
14
NDPBs and other
designated bodies
26
41
-
70
16
153
Carrying amount at
31 March 2019
30
43
-
70
24
167
Departmental Group
2017-18
Information
Technology
Software
Licences
Websites
Patents
Assets under
Construction
Total
£m
£m
£m
£m
£m
£m
Cost or Valuation
At 1 April 2017
139
52
1
267
7
466
Additions
10
3
-
-
20
33
Disposals
(3)
(1)
-
-
-
(4)
Reclassifications
6
17
-
-
(21)
2
Transfers in/(out)
-
-
-
-
1
1
Revaluations
-
1
-
30
-
31
At 31 March 2018
152
72
1
297
7
529
Amortisation
At 1 April 2017
(107)
(28)
(1)
(227)
-
(363)
Charged in year
(11)
(6)
-
(8)
-
(25)
Disposals
3
1
-
-
-
4
Reclassifications
1
(1)
-
-
-
-

Annual report and accounts 2018-19
152
Departmental Group
2017-18
Information
Technology
Software
Licences
Websites
Patents
Assets under
Construction
Total
£m
£m
£m
£m
£m
£m
At 31 March 2018
(114)
(34)
(1)
(235)
-
(384)
Carrying amount at
31 March 2018
38
38
-
62
7
145
Carrying amount at 1
April 2017
32
24
-
40
7
103
Asset financing:
Owned
38
38
-
62
7
145
Carrying amount at 31
March 2018
38
38
-
62
7
145
Of the total:
Core Department and
Agencies
2
4
-
-
3
9
NDPBs and other
designated bodies
36
34
-
62
4
136
Carrying amount at 31
March 2018
38
38
-
62
7
145
All software licenses are acquired separately.
All Information Technology (IT) assets are internally generated. IT assets are initially classified as assets
under construction and are not amortised until they are commissioned, at which time they are re-
classified as IT.
The Departmental Group holds its intangible assets at valuation. In accordance with the FReM,
the Departmental Group adopts cost less amortisation as a proxy for fair value as the intangible
assets have short lives. The exception to this is patents which are held at fair value based on a
valuation model.
The model uses a variety of assumptions to estimate the value of future income streams from the
patents to determine the fair value; these include an estimate for future royalty income derived from
the consensus forecast data from industry specialists, which are adjusted for expected future USD/
GBP exchange rates, the territories in which the patents are applicable and potential threats to future
income (such as competitor products and regulatory approval). In accordance with IFRS 13, these
assumptions would be classed as level 3 assumptions. The carrying amount of the patents at 31
March 2019 is £70 million (2017-18: £62 million) and there would need to be a substantial increase in
expected royalty income to result in a material increase in the fair value of the patents.
9 Derivative financial instruments
The most significant items included within Derivatives on the Consolidated Statement of Financial
Position (SoFP) are the Contracts for Difference (CfDs).
Contracts for Difference (CfDs)
Contracts for Difference (CfDs) are a mechanism used to support investment in UK low carbon
generation projects. CfDs have been established as a contract between the ‘Generator’ and the
Low Carbon Contracts Company Ltd (LCCC), a company wholly owned by the government and
consolidated within the department’s accounts.
CfDs, other than the CfD relating to Hinkley Point C (HPC) nuclear generating plant, have been
classified as derivatives in accordance with IFRS 9 ‘Financial Instruments’ and in the prior
year in accordance with IAS 39 ‘Financial Instruments: Recognition and Measurement’ and
recognised at their ‘fair value’ by deferring the difference between fair value and transaction price
at initial recognition. Any subsequent gain or loss in fair value is recognised in the Statement of
Comprehensive Net Expenditure. The HPC CfD has not been recognised in these accounts and its
accounting treatment is described under heading ‘Hinkley Point C’ of this note.

Financial Statements
153
The fair value of any derivative is assessed by reference to IFRS 13 ‘Fair Value Measurement’, which
provides three options for assessment. Fundamentally the value should always reference an open
market place but where no market place exists, an option is available for internally generated fair
value. The different options are hierarchical and classed as Level 1, 2, or 3 inputs, where Level 1 is
based on market prices, Level 2 is based on observable data other than market prices and Level 3 is
used where Level 1 or 2 data is unavailable.
The fair value of the department’s CfDs has been calculated using the income approach based on
Level 3 inputs, which reflects the present value (PV) of future cash flows that are expected to occur
over the contract term of the CfD. The discount rate which has been used to determine the PV for
financial reporting is the Financial Instrument real rate of 0.7% set by HM Treasury Public Expenditure
System (PES) Secretariat on 7 December 2018.
By contrast, for investment decisions and project appraisal, the department is required to use the
social discount rate of 3.5% published in HM Treasury’s Green Book. As the cash flows from HPC
CfD are expected to occur over a 35 year period from 2025 to 2060, the valuation for financial
reporting based on the 0.7% discount rate will be significantly higher than the economic valuation
based on the 3.5% discount rate, even where all other inputs are the same.
The deferred difference between the fair value of the liability on day one and the transaction price is
amortised over the contract life of the CfDs, which commences from the earlier of i) the actual start
date of generation or ii) the end of the Target Commissioning Window (TCW) identified in the CfD,
as this is the point at which the contractual liability will start to unwind (i.e. it is the point at which the
potential payment period under the CfD commences).
The significance of these two dates is that they are the part of the contractual provisions which
determine when the right to potential CfD payments starts. The contract payment period is typically
for 15 years, but specific exceptions exist:
• for contracts relating to biomass conversion which have an expiration date in 2027;
• the contract for HPC nuclear generating plant which will expire at the earlier of 35 years after
the start date of the second reactor or when the total CfD payments made have reached the
Generation Cap (i.e. 910,000,000 MWh).
CfDs may be signed many years in advance of actual generation. The main benefit to generators
is the fact that they can derive economic benefit from these contracts across the payment period
life of the contract and the added certainty which the CfD contract provides helps them to
finance the project.
Under the legislation, there is an obligation placed on licensed electricity suppliers to fund the CfD
liabilities as they crystallise through the Supplier Obligation Levy. The future levy amounts which will
be received from the licensed suppliers will be accounted for within LCCC and will be triggered by the
generation and supply of low carbon electricity.
As at 31 March 2019 LCCC was counterparty to 53 contracts recognised in the accounts (at 31
March 2018: 56 contracts). The liability associated with HPC has not been recognised in the accounts
and is further explained below.
Measurement differences relating to day one recognition
The transaction price for CfDs differs from the fair value at initial recognition measured using a
valuation model, mainly because the transaction price is not established in an active market. If there
are significant unobservable inputs used in the valuation technique (Level 3), the financial instrument is
recognised at the transaction price and any difference between the transaction price and fair value at
initial recognition measured using a valuation model is deferred.

Annual report and accounts 2018-19
154
The following table represents the difference between the CfD liability at initial recognition and at the
reporting date:
Core Department
and Agencies
LCCC CfDs
Departmental
Group Total
£m
£m
£m
CfD liability as at 31 March 2017 recognised on
the Consolidated Statement of Financial Position
-
12,334
12,334
Re-measurement of the CfD liability
-
3,720
3,720
Payments to the CfD generators
-
(544)
(544)
Deferred difference recognised during the year
-
382
382
CfD liability as at 31 March 2018 recognised on
the Consolidated Statement of Financial Position
-
15,892
15,892
Other non-CfD liabilities as at 31 March 2018
-
-
12
Carrying value of non-current derivative liabilities
as at 31 March 2018
-
15,892
15,904
Remeasurement of the CfD liability
-
(2,743)
(2,743)
Release of liability relating to terminated contracts
-
39
39
Payments to the CfD generators
-
(980)
(980)
Deferred difference recognised during the year
-
713
713
CfD liability as at 31 March 2019 recognised on
the Consolidated Statement of Financial Position
-
12,921
12,921
Other non-CfD liabilities as at 31 March 2019
-
-
2
Carrying value of non-current derivative liabilities
as at 31 March 2019
-
12,921
12,923
The net movement in the fair value of CfDs is recognised in the Statement of Comprehensive
Net Expenditure.
Movement in deferred measurement differences
The following table shows the movement in deferred day one loss.
Core
Department
and Agencies
LCCC CfDs
exc. HPC
Departmental
Group Total
£m
£m
£m
Deferred measurement differences as at 31 March 2017
-
19,079
19,079
Measurement differences deferred during the year
-
4,612
4,612
Deferred measurement differences recognised during the year
-
(382)
(382)
Carrying value of CfDs at 31 March 2018
-
23,309
23,309
Measurement differences recognised in respect of terminated
CFDs
-
(268)
(268)
Deferred measurement differences recognised during the year
-
(713)
(713)
Deferred measurement differences as at 31 March 2019
-
22,328
22,328
Fair value measurement of CfDs
The fair value of CfDs (which excludes the HPC CfD which has not been recognised in these
accounts) represents the LCCC’s best estimate of the payments which the LCCC will be committed
to make, if and when the generators supply low carbon electricity in accordance with their contractual
terms. They are based upon the estimates of future electricity prices to forecast the potential liabilities
using the Dynamic Dispatch Model (DDM) owned by the department.
Should no low carbon electricity be supplied in accordance with the contractual terms, then the
LCCC is not under any obligation to make these payments.

Financial Statements
155
Fair value of CfDs (financial liabilities at fair value through profit and loss)
The following table shows the impact of the fair value of all CfDs which have been recognised in these
accounts, classified under Level 3, by using the assumptions described below (all held by LCCC):
LCCC CfDs exc. HPC
Departmental Group Total
£m
£m
Balance at 31 March 2017
31,413
31,413
Additions during the year
4,612
4,612
Change in fair value during the year
3,720
3,720
Payments to the CfD generators
(544)
(544)
Balance at 31 March 2018
39,201
39,201
Change in fair value during the year
(2,743)
(2,743)
CFDs terminated during the year
(229)
(229)
Payments to the CfD generators
(980)
(980)
Balance at 31 March 2019
35,249
35,249
The decrease in fair value year-on-year is mainly due to revisions to the wholesale price electricity
forecasts that are expected to be achieved by generators and payments made during the 2018/19
year. These decreases are partially offset by the change in indexation for 2019. The actual cash
payments made to generators during the lives of the contracts will vary, depending upon a number of
key matters, such as projected wholesale electricity prices, commissioning dates for generation and
the average load factor for each generator.
The fair value of the unquoted contracts has been estimated using a discounted cash flow model.
This method involved the projection of a series of cash flows and application of a discount rate
to establish the present value of the expenses associated with the liability. The valuation requires
management to make certain assumptions about the model inputs, including cash flows, the discount
rate, credit risk and volatility. Further information relating to the assumptions is included below.
Key assumptions (excluding HPC CfD)
The probabilities of the various estimates within the range can be reasonably assessed and are used
in management’s estimate of fair value for these unquoted contracts. Annual cash flow is estimated
as reference price less strike price multiplied by estimated generation delivered. The series of cash
flows is then discounted using the HM Treasury discount rate of 0.7% (2017-18: 0.7%). The following
assumptions are key to the CfD valuation:
a. Transmission Loss Multiplier (TLM)
TLM reflects the fact that electricity is lost as it passes through the transmission system from
generators to suppliers. If the TLM is incorrect, this will have implications for the volume of electricity
subject to CfD payments. Any change in TLM will be corrected through adjustments in strike prices
although the change in TLM is expected to be immaterial.
b. Start date
Generators nominate a Target Commissioning Date (TCD) in their binding application form for a CfD,
and this date is specified in their CfD following contract award. However, the generator is free to
commission at any time within their Target Commissioning Window (TCW), a period of one year from
the start of the TCW for most technologies, with no penalty, or after the end of the TCW and up to
their ‘Longstop Date’ (one to two years after the end of the TCW depending on technology) with a
penalty in the form of reduction of contract length for each day they are late in commissioning after
the end of the TCW. The contract can be terminated if the generator has not commissioned 95% (or
85% for Investment Contracts and offshore wind) of their revised installed capacity estimate by the
end of the Longstop Date. Any change to the start date will change the timing of future cash flows
and impact on the discounted fair value. The valuation uses the most recent estimate from generators
on the start date.

Annual report and accounts 2018-19
156
c. Strike price
The strike price is an agreed price which determines the payments made to the generator under the
contract with reference to its low carbon output and the market reference price. The relevant strike
price is specified in each CfD and is not intended to change for the duration of the project other than
through indexation to CPI and certain network charges or in the event of certain qualifying change in
law. The strike price used in the valuation of the CfDs is the 2019-20 strike price and reflects the CPI
rate for January 2019 in-line with the requirements of the CfD contract.
d. Future forecast wholesale electricity prices
Forecast wholesale electricity prices are derived from the DDM which has been developed by the
department to facilitate/inform policy decisions by modelling investor behaviour in response to fuel
and carbon prices and policy environment. The DDM estimates the wholesale price by:
• using the Short Run Marginal Cost (SRMC) for each plant
• using daily demand for electricity, taking into account wind profiles, inter-connector flows, pumped
storage, auto-generation and wind generation
• using a mark-up on the price derived from historic data and the difference between marginal price
and cost affected by reduced capacity
Economic, climate, policy, generation and demand assumptions are external inputs to the model
including demand load curves for both business and non-business days and seasonal impacts.
Specific assumptions can also be modelled for domestic and non-domestic sectors and smart
meter usage.
The forecast trajectory of electricity prices is uncertain. In the valuation, the central case from the
DDM has been used. The DDM also produces low and high cases. These have been included in the
sensitivity analysis.
In the valuation, the wholesale price has been reduced to reflect the price the wind generator is likely
to receive. Additionally, wholesale electricity forward prices have been used for the liquid trading
horizon (covering the nearest 2 years period). On windy days, the price that wind generators receive is
likely to be reduced. The effect of reduced prices for wind generation adds approximately £3.1 billion
to the valuation.
e. Installed capacity
The figure for the maximum installed capacity was provided by the generator in its application for a
CfD and specified in its CfD contract following allocation. The installed capacity cannot be increased
after contract signature, but can be reduced by the generator by no more than 25% with no penalty
between contract signature and the completion of the first contractual milestone by its contractual
deadline (i.e. the Milestone Requirement which must be completed 12 months after contract
award). Thereafter the installed capacity figure can only be reduced by the generator for a permitted
contractual construction event (which is a narrowly defined concept) or by the difference by which the
relevant project has an installed capacity of 95% (or 85% in the case of offshore wind) of its current
contractual installed capacity figure and 100%. The actual output of the generator will depend on the
load factor.
f. Load factor
Load factor is defined as the actual power output of a project as a proportion of its rated installed
capacity. It is a percentage figure which is used to transform installed capacity into actual power
output (generation). Load factor assumptions are based on reference factors published by the
department for given technology types; however, actual power outputs are sensitive to technological
and environmental factors which may impact actual cash flows. Plant specific load factors (where
a minimum of 6 months’ generation data is available) is also available for consideration when
valuing the CfDs.

Financial Statements
157
Sensitivity analysis (excluding HPC CfD)
The following table shows the impact on the fair value of CfDs, classified under Level 3 in accordance
with IFRS 13 ‘Fair Value Measurement’, by using reasonable possible alternative assumptions:
Change in fair value of CfDs recognised in the accounts if:
Favourable changes
Unfavourable changes
£m
£m
Electricity prices decrease by 10%
-
2,857
Electricity prices increase by 10%
2,857
-
10% more load factor
-
3,525
10% less load factor
3,525
-
Estimated Commissioning Date moves back by one year
390
-
Generation starts at the earliest possible date
-
184
DDM high case
3,822
-
DDM low case
-
5,625
The fair value is highly dependent upon the actual capacity generated once the plant is built and the
electricity prices which will prevail at the time of generation. The favourable and unfavourable changes
show how the impact of changes in capacity and prevailing electricity prices will affect the fair value
of CfDs due to the change in the level of cash flows. The Group auditors continue to include an
emphasis of matter paragraph in their audit certificate concerning the uncertainty around valuation of
these CfD contracts.
Significant unobservable inputs
The following table discloses the valuation techniques and significant unobservable inputs for CfDs
recognised at fair value and classified as Level 3 along with the range of values used for these
significant unobservable inputs.
Fair value of CfDs
£m
Valuation
technique
Significant
unobservable input
Range
Min - Max
Units
2018
39,201
DCF
Future electricity prices
37.13 - 63.25
£/MWh
2019
35,249
DCF
Future electricity prices
44.55 - 67.73
£/MWh
Hinkley Point C
The department entered into the Hinkley Point C (HPC) CfD on 29 September 2016. This project has
a maximum lifetime generation cap of 910,000,000 MWh. The HPC contract will expire at the earlier
of 35 years after the start date of the second reactor or when the total CfD payments made have
reached the generation cap.
The valuation of HPC CfD requires that an assumption be made of wholesale electricity prices in
each year to 2060. The department uses its Dynamic Despatch Model to develop scenario-based
estimates of future wholesale electricity prices. This model currently extends only as far as 2050 and
the department has therefore assumed flat wholesale prices for the ten years 2050-2060. Moreover
there is an inherent limitation in accurate estimation beyond 2050 because there is a paucity of
independent third-party information beyond this point from which to validate the department’s
assumptions. The unavoidable uncertainty over possible scenarios so far into the future extend to
a variety of factors including electricity demand, fossil fuel prices, generation mix, carbon prices
and technology.

Annual report and accounts 2018-19
158
Under IFRS the Conceptual Framework (2010) sets out the concepts which underlie the preparation
and presentation of financial statements. The Conceptual Framework deals with, amongst other
things, the definition, recognition and measurement of the elements from which financial statements
are constructed. Paragraph 4.38 of the Conceptual Framework states that an element should be
recognised in the accounts if:
a) it is probable that any future economic benefit associated with the item will flow to or from the entity
b) the item has a cost or value that can be measured with reliability (defined as: using information that
is complete, neutral and free from error)
In comparison to other CfDs the department considers the CfD for HPC to be unique. The European
Pressurised Reactor is a much more complex asset than the wind turbines or bio-mass generators
associated with the department’s other CfDs. It has very high levels of safety, reinforcement and
containment incorporated into the design, which make it more expensive and complex to build and
result in a significant lead time before generation commences (planned for 2025). Until these challenges
are overcome and the asset is built, no payments will be made by the department under the CfD. This
unavoidably long lead time before generation commences is relevant to condition (a) above.
The HPC CfD contract duration is also more than double (35 years) the length of other CfDs (15 years)
so far entered into by the department. This makes it considerably more challenging to provide a single
point fair value estimate, as required for accounting purposes, as that requires estimation of future
wholesale electricity prices in every year out to 2060. This means that there are considerable but
unavoidable uncertainties in creating a fair value estimate for the HPC CfD because of the unusually
long time period involved.
Uncertainty increases with time and so the choice of discount rate plays a significant part in
determining how much uncertainty is weighted into a present value calculation; a higher discount
rate places less weight on increasingly more uncertain later years of a present value calculation. For
example, in conducting the economic appraisal for the HPC project the department used the social
discount rate of 3.5% per year, as required by the HM Treasury Green Book. However for valuing
financial instruments like CfDs the department is obliged to use the financial instrument discount
rate of 0.7%, as required by the Government Financial Reporting Manual. Therefore, compared to
an economic appraisal, a present value estimate for a financial instrument includes progressively
more weight from the less certain later years of the appraisal period. For comparison, using the
social discount rate leads to a valuation of £16.6 billion compared to £30.3 billion using the financial
instrument discount rate of 0.7%.
This is particularly relevant to the HPC CfD fair value because external forecasts for wholesale
electricity prices are not currently readily available beyond 2050. It has not been possible for the
department to satisfactorily verify whether a single point fair value estimate for the HPC CfD is
complete, neutral and free from error. (Verifiability is one of the qualitative characteristics of useful
financial information for financial statements as set out in the Conceptual Framework.) The department
has therefore concluded that for the time being the HPC CfD fails to meet the recognition criteria
(b) as outlined above. Therefore, the HPC CfD has not been recognised as a transaction in these
primary statements.
The department has nonetheless set out below its best estimation of the fair value of the contract,
and the assumptions which have been considered in its valuation, in the interests of transparency.
This follows a ‘Level 3’ methodology under IFRS 13 ‘Fair Value Measurement’, which allows for use of
the entity’s own models and assumptions.
Fair value measurement of HPC
The department has set out below its best estimation of the fair value of the contract, and the
assumptions which have been considered in its valuation. This follows a Level 3 methodology under
IFRS 13 ‘Fair Value Measurement’, which allows for use of the entity’s own models and assumptions.
This disclosure is consistent with IFRS 9 ‘Financial Instruments’ and in the prior years in accordance
with IAS 39 ‘Financial Instruments’ where the initial recognition of a financial instrument like the HPC
CfD requires a deferred liability disclosure rather than a transaction of the initial fair value estimate
through the primary statements.

Financial Statements
159
The following table provides an analysis of the fair value of HPC, grouped into Levels 1 to 3 within the
fair value hierarchy based on the degree to which the fair value is observable:
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Balance at 31 March 2018
-
-
36,585
36,585
Balance at 31 March 2019
-
-
30,309
30,309
The department’s estimate of the fair value of the liabilities under the HPC CfD at 31 March 2019
is £30,309 million. This represents a £6,276 million (17%) decrease on the valuation prepared to 31
March 2018. The reduction year-on-year is mainly as a result of revisions to the wholesale electricity
forecasts used within the valuation. In common with the other CfDs, payments made during the
financial year will vary due to changes within projected wholesale electricity prices, commissioning
dates for generation and the average load factor of the generator
Information on other factors which impact on the fair value of HPC is set out below;
Start date
The Target Commissioning Date (TCD: current expected start date) for reactor one and reactor two of
the HPC project are 1 December 2025 and 1 June 2026 respectively.
The TCW for reactor one is 1 May 2025 to 30 April 2029. The TCW for reactor two is 1 November
2025 to 31 October 2029.
Any change to the start date will change the timing of future cash flows and impact on the
discounted fair value.
Equity gain share for HPC
The equity gain share mechanism consists of two separate components: (i) a mechanism to capture
gains above specified levels where the HPC project outperforms relative to the original base case
assumptions; and (ii) a mechanism to capture gains above specified levels arising from the sale of
equity and economic interests (direct or indirect) in the HPC project.
In each case, as and when the Internal Rate of Return (IRR) thresholds are reached:
• If the relevant IRR is more than 11.4%, the LCCC will receive 30% of any gain above this level
• If the relevant IRR is more than 13.5%, the LCCC will receive 60% of any gain above this level.
Installed Capacity
HPC which does not have an installed capacity cap, is only entitled to CfD payment support up to a
Generation Cap of 910,000,000 MWh.
Strike price
The strike price is an agreed price which determines the payments made to the generator under the
contract with reference to its low carbon output and the market reference price. The relevant strike
price is specified at £92.50 in real 2012 terms and is not intended to change for the 35 year contract
duration, other than through indexation to CPI and certain network charges, or in the event of certain
qualifying changes in law.
In addition to the factors mentioned above, HPC’s strike price change is also subject to the following
three additional factors:
1. Construction gain share for HPC
If the construction costs of HPC come in under budget, the strike price will be adjusted downwards
so that the gain (or saving) is shared with the LCCC. The gain share is 50/50 for the first billion
pounds, with savings in excess of this figure being shared 75% to the LCCC and 25% to the
generator, NNB Generation Company (HPC) Limited (NNBG).
If the outturn cost of construction is less than assumed then by reducing the strike price the amounts
paid out to NNBG under the CfD will reduce and hence the benefit of the lower construction costs is

Annual report and accounts 2018-19
160
shared between NNBG and ultimately consumers. There is, however, no similar upward adjustment if
the construction cost of HPC is over budget.
2. OPEX reopener for HPC
The strike price may be adjusted upwards if the operational expenditure costs are more than assumed
and downwards if they are less. There are two operational expenditure reopener dates, at 15 years
and 25 years after the first reactor start date. The rationale behind the reopener is that the strike price
is based on long-term assumptions on operational expenditure costs. The reopener provides a way of
mitigating long-term cost risks for both parties.
3. Sizewell C strike price adjustment for HPC
If a CfD in relation to Sizewell C is entered into before the reactor one start date then the
applicable strike price shall be reduced with effect from the date of satisfaction of the Sizewell C
condition by £3/MWh.
Sensitivity analysis
Using a Level 3 technique to assess the value of the HPC CfD is permissible when there is no
observable input against which to assess the valuation. The department has used internally
generated models and assumptions consistent with an emissions pathway towards the government’s
decarbonisation commitments to generate the wholesale electricity price scenarios used in the
valuation of the HPC CfD. There is unavoidable uncertainty inherent in all such modelling and as such
the results should be interpreted as a range of plausible scenarios rather than a single point value.
However, IFRS13 ‘Fair Value Measurement’ requires that a single amount be declared for fair value
and so to satisfy this condition the department has adopted its central scenario when valuing the HPC
CfD. In the sensitivity analysis a high and a low case scenario have also been included.
To provide transparency for the reader it is important to highlight the uncertainty inherent in material
values over a long period of time such is the nature of this CfD. The predicted price series from the
DDM between 2025 and 2050 (flat-lined from 2050 to 2060) has a higher degree of certainty in the
early years (2025-2050) and a lower degree of certainty in later years (2050-2060). This is due to the
lack of available market data against which to judge the output. In the valuation, the DDM central case
has been used. The department also publishes low and high cases. These have been included in the
sensitivity analysis.
The department has illustrated some empirical impact of changes in assumptions on the fair value of
the HPC CfD. These are shown in the table below:
Change in fair value of HPC if:
Favourable changes
£m
Unfavourable changes
£m
Electricity prices decrease by 10%
-
4,967
Electricity prices increase by 10%
4,967
-
At generation cap
-
192
10% less load factor
3,031
-
Estimated commissioning date moves back one year
368
-
Generation starts one year earlier
-
389
Sizewell C strike price adjustment for HPC
2,613
-
DDM Low Case
-
10,753
DDM High Case
4,370
-

Financial Statements
161
10 Investments and loans in other public sector bodies
Ordinary shares
Public Dividend
Capital
Other
investments
and loans
Core Department
and Agencies Total
Elimination of
shares and other
investments and
loans held in NDPBs
NDPBs Ordinary
Shares
Departmental
Group Total
£m
£m
£m
£m
£m
£m
£m
Balance at 1 April 2017
1,723
81
367
2,171
(1,276)
422
1,317
Additions
393
-
243
636
(556)
30
110
Disposals
(7)
-
-
(7)
7
-
-
Redemptions
-
-
(22)
(22)
22
-
-
Impairments
23
-
-
23
(23)
-
-
Revaluations
214
-
-
214
-
8
222
Unwinding of discount
-
-
1
1
-
-
1
Loans repayable within 12 months
transferred to current assets
-
-
(20)
(20)
-
-
(20)
Balance at 31 March 2018
2,346
81
569
2,996
(1,826)
460
1,630
Additions
125
-
305
430
(352)
-
78
Redemptions
-
-
(24)
(24)
24
-
-
(Impairments) / Impairment reversal
(30)
-
-
(30)
30
-
-
Revaluations
38
-
-
38
-
29
67
Unwinding of discount
-
-
1
1
(1)
-
-
Loans repayable within 12 months
transferred to current assets
-
-
(63)
(63)
46
-
(17)
Balance at 31 March 2019
2,479
81
788
3,348
(2,079)
489
1,758

Annual report and accounts 2018-19
162
10.1 Ordinary Shares in other public sector bodies
31 March 2019
31 March 2018
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Balance at 1 April
2,346
1,337
1,723
1,086
Additions
125
-
393
30
Disposals
-
-
(7)
-
(Impairments) / Impairment reversal
(30)
-
23
-
Revaluations
38
67
214
221
Reclassification
-
-
-
-
Balance at 31 March
2,479
1,404
2,346
1,337
Comprising
Ordinary Shares held within the
Departmental boundary - held at cost
1,564
-
1,468
-
Ordinary Shares held outside the
Departmental boundary - held at fair value
915
1,404
878
1,337
Balance at 31 March
2,479
1,404
2,346
1,337
Core Department
Ordinary Shares in other public sector bodies held within the Departmental boundary
In accordance with the FReM, ordinary shares held within the Departmental boundary are carried at
historical cost less any provision for impairment. They are eliminated on consolidation.
British Business Bank Plc (BBB)
The core Department holds 1,496,407,933 ordinary shares (31 March 2018: 1,371,407,933), each with
a nominal value of £1. BEIS made £125 million (31 March 2017: £300 million) of share capital additions
in BBB during the year. The core Department’s holding had a cost of £1,496 million at 31 March 2019
(31 March 2018: £1,371 million).
The principal objective of the company is to address long-standing, structural gaps in the supply of
finance and bring together in one place Government finance support for small and mid‑sized businesses.
UK Green Infrastructure Platform (UK GIP)
On 17 August 2017, immediately after the sale of the Green Investment Bank (GIB), the core
Department acquired 900 shares (90% of the share capital) of UK Green Infrastructure Platform
Limited, each with a nominal value of £1.
UKGIP was acquired for £93 million and the recognition of a shareholder loan of £40 million. The core
Department’s holding had a cost less provision for impairment of £65 million at 2018-19 (2017-18:
£93 million). The total loan outstanding at 2018-19 was £8 million (2017-18: £31 million) which is
included within the loans and investments in public sector bodies note.
UKGIP was established to enable Government to retain an interest in five existing GIB investments.
The Green Investment Group is the remaining 10% shareholder. The primary activity of UK GIP is to
hold green investments and identify opportunities to realise them in a way which returns best value for
taxpayers’ money.
UK Shared Business Services Limited (UKSBS)
The core Department holds 62,016,358 non-voting shares and one voting share in UKSBS, held at
cost less provision for impairment of £3 million at 31 March 2019 (31 March 2018: £3 million).

Financial Statements
163
The company is a specialist business services organisation that provides finance, procurement,
grants, information systems and HR and payroll services to the public sector. Its main objective is to
improve the economy, efficiency and effectiveness of corporate services to BEIS bodies.
Low Carbon Contracts Company Limited (LCCC)
The core Department holds one ordinary share in LCCC with a nominal value of £1.
The principal objective of the company is to be the counterparty to and manage Contracts for
Difference (CfDs) throughout their lifetime.
Electricity Settlements Company Limited (ESC)
The core Department holds one ordinary share in ESC with a nominal value of £1.
The principal objective of the company is to oversee settlement of the Capacity Market agreements.
Enrichment Holdings Limited (EHL)
The core Department holds two shares of £1 each in EHL with a nominal value of £2.
EHL has been set up as a holding company, along with a subsidiary company, Enrichment
Investments Limited (EIL), solely to hold the Government’s one third share in Urenco Limited, an entity
operating in the civil uranium enrichment sector.
BIS (Postal Services Act 2011) Company Limited
The core Department holds one ordinary share in BIS (Postal Services Act 2011) Company Limited
with a nominal value of £1.
The principal objective of the company is to dispose of the assets transferred to it from the Royal Mail
Pension Plan (RMPP).
South Tees Site Company Limited (STSC)
The core Department holds one ordinary share in STSC with a nominal value of £1.
The principal objective of the company is to secure and manage the South Tees Site.
Postal Services Holding Company Limited (PSH)
The Secretary of State for BEIS owns 50,005 ordinary shares in PSH which is 100% of the issued
share capital at a historic cost of £430 million at 31 March 2019 (31 March 2018: £430 million). The
Secretary of State for BEIS also owns one special share in PSH, relating to certain areas for which
Special Shareholder’s consent is required.
The core Department’s holding had a cost less provision for impairment of £nil at 31 March 2019 (31
March 2018: £nil million), due to a return of capital from PSH to BEIS core of £6.9 million during 2017-
18. PSH is currently in the process of liquidation due to the cessation of its primary activities.
The principal objective of the company prior to cessation was to hold and manage its shares in POL.
Ordinary Shares held outside of the Departmental boundary
Shares held outside of the Departmental boundary are carried at fair value.
Post Office Limited (POL)
The core Department holds 50,003 ordinary shares in POL at a nominal value of £1 each which is
100% of the issued share capital. There is a special share in POL (nominal value of £1) which is held
directly by the Secretary of State for BEIS.
This shareholding is held at fair value, but as there is no active market for these shares the net asset
value of POL is considered to be a reasonable approximation for fair value. The fair value of the
investments, held by the core Department, as at 31 March 2019 was £256 million (31 March 2018:
£195 million).

Annual report and accounts 2018-19
164
The principal objective of POL is to provide retail post office services through its national
network of branches.
British Nuclear Fuels Limited (BNFL)
The core Department holds 50,000 ordinary shares in BNFL at a nominal value of £1 each. The
Secretary of State for BEIS holds 49,999 ordinary shares and the Treasury Solicitor holds one
ordinary share.
The core Department’s shareholding is held at fair value, but because there is no active market for
these shares the net asset value of BNFL is considered to be a reasonable approximation of fair value.
The fair value as at 31 March 2019 was £324 million (31 March 2018: £324 million).
Ordnance Survey Limited (OSL)
The core Department holds 34,000,002 ordinary shares in OSL at a nominal value of £1 each which is
100% of the issued share capital.
The shareholding is held at fair value, but as there is no active market for these shares the net asset
value of OSL is considered to be a reasonable approximation for fair value. The fair value as at 31
March 2019 was £179 million (31 March 2018: £196 million).
The principal objective of OSL is to produce mapping products and mapping data information.
NPL Management Limited (NPLML)
The core Department holds 57 ordinary shares in NPLML which is 100% of the issued share capital.
The shareholding is held at fair value, but as there is no active market for these shares the net asset
value of NPLML is considered to be a reasonable approximation for fair value. The fair value as at 31
March 2019 was £78 million (31 March 2018: £85 million).
NNL Holdings Limited (NNLH)
The core Department holds two shares of £1 each in NNLH with a nominal value of £1 each.
NNLH has been set up as a holding company, to hold all the shares in the National Nuclear
Laboratory Limited.
The shareholding is held at fair value but because there is no active market for these shares the net
asset value of NNLH is considered to be a reasonable approximation of fair value. The fair value as at
31 March 2019 was £79 million (31 March 2018: £78 million).

Financial Statements
165
NDPBs and other designated bodies
NDA subsidiaries
The NDA controls the following subsidiaries, all of which are outside the Departmental Group
boundary and not consolidated into these accounts. The holdings are valued at fair value. As there is
no active market, the net assets of the entities are considered the most appropriate approximation of
fair value, and amounted to £489 million as at 31 March 2019 (31 March 2018: £459 million).
Name
Country of
incorporation
Nature of business
Holding
entity
Proportion
of ordinary
shares held
Direct Rail Services Limited
UK
Rail transport services within the UK
NDA
100%
International Nuclear Services
France SAS (i)
France
Transportation of spent fuel
NDA
100%
International Nuclear Services
Japan KK (i)
Japan
Transportation of spent fuel
NDA
100%
International Nuclear Services
Limited
UK
Contract management and the
transportation of spent fuel,
reprocessing products and waste
NDA
100%
NDA Properties Limited
UK
Property management
NDA
100%
Pacific Nuclear Transport
Limited (i)
UK
Transportation of spent fuel,
reprocessing products and waste
NDA
68.75%
Rutherford Indemnity Limited
Guernsey
Nuclear insurance
NDA
100%
(i) Ownership through International Nuclear Services Limited.
10.2 Public Dividend Capital (PDC)
Companies
House
UK Intellectual
Property Office
Met Office
Total
£m
£m
£m
£m
Balance at 1 April 2017
16
6
59
81
Additions
-
-
-
-
Redemptions
-
-
-
-
Impairments
-
-
-
-
Balance at 31 March 2018
16
6
59
81
Additions
-
-
-
-
Redemptions
-
-
-
-
Impairments
-
-
-
-
Balance at 31 March 2019
16
6
59
81
PDC is held by the core Department.
In accordance with the FReM, PDC is carried at historical cost less any impairment.
Companies House has been reclassified from a trading fund to a central government body. It is
exempted from consolidation for 2018-19 and will be consolidated from 2019-20 onwards.
10.2.1 Share of net assets and results for Public Dividend Capital holdings outside the Departmental
consolidation boundary
The department is required to disclose its share of the net assets and the results for the year of other
public sector bodies, which are outside of the departmental boundary. The following disclosures
relate to the Department’s trading funds

Annual report and accounts 2018-19
166
Companies
House
UK Intellectual
Property Office
Met Office
£m
£m
£m
Net Assets/(Liabilities) at 31 March 2018
79
92
258
Turnover
69
96
230
Surplus/profit (deficit/loss) for the year before financing
3
10
20
Net Assets/(Liabilities) at 31 March 2019
79
93
259
Turnover
72
100
239
Surplus/profit (deficit/loss) for the year before financing
4
5
3
For all bodies, information for 2018-19 was derived from their draft unaudited accounts. The
information for 2017-18 was derived from their audited accounts. The accounts were prepared on an
IFRS basis, in accordance with the requirements of the FReM.
10.3 Other investments and loans in public sector bodies
31 March 2019
31 March 2018
Core Department
and Agencies
Departmental
Group
Core Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Balance at 1 April
569
211
367
150
Additions
305
79
243
80
Repayments
(24)
-
(22)
-
Unwind of discount
1
-
1
-
Revaluations
-
-
-
1
Loans repayable within 12 months
transferred to current assets
(63)
(17)
(20)
(20)
Balance at 31 March
788
273
569
211
Core Department
Loans in other public sector bodies
The balance comprises a number of loans to public sector bodies, the most significant loans making
up the balance are detailed below:
Energy Efficiency Loans
The core Department’s energy efficiency loans scheme was set up under the Environmental
Protection Act 1990 to help businesses and public sector organisations reduce their energy costs by
providing interest free loans for the implementation of energy efficiency projects. The total carrying
amount with public sector bodies is £212 million at 31 March 2019 (31 March 2018: £180 million).
The non-current element of the loans is £169 million at 31 March 2019 (31 March 2018: £141 million)
included in the table above; the current element of these loans is £43 million at 31 March 2019 (31
March 2018: £39 million), which is included in note 16.
These loans are to non-consolidated public sector entities and are not eliminated on consolidation.
Fleetbank Funding Limited Loan (Enable Funding programme)
The core Department’s loan to Fleetbank Funding Limited is to provide funding to support the Enable
Funding programme, managed by the British Business Bank. This was launched in November 2014
and aimed at improving the provision of asset and lease finance to smaller UK businesses.
The carrying amount of the Fleetbank Funding Limited loan is £339 million at 31 March 2019 (31
March 2018: £205 million).

Financial Statements
167
This loan is to an entity that is consolidated within these financial statements and the loan is eliminated
on consolidation.
Northern Powerhouse Investment Limited and Midlands Engine Investment Limited Loans
The core Department has loans with Northern Powerhouse Investment Fund and Midlands Engine
Investment Fund. The funds are matched by funding from the European Investment Bank. The funds
are set up to provide commercially-focused finance to help small and medium sized enterprises
start up and grow.
The carrying amount of the loan investments in these entities is £109 million at 31 March 2019 (31
March 2018: £63 million). The loans are accounted for at cost under IAS 27 and disclosed in the core
Department and Agencies column.
These loans are to consolidated bodies and are eliminated on consolidation.
10.4 Special Shares
The Secretary of State holds one Special Share in each of the entities listed below. The list is a
summary and not a comprehensive record of the terms of each respective shareholding. Further
details can be obtained from the annual report and financial statements of each body or their Articles
of Association.
The core Department does not recognise the special or ‘golden’ shares on its Statement of
Financial Position.
Body in which Share is held
and type and value of Share
Significant terms of Shareholding
Postal Services Holding
Company Limited.
£1 Special Rights Preference
Share
• Created in January 2001 (formerly called Royal Mail Holdings plc)
• It may be redeemed at any time by the shareholder
• The consent of the special shareholder is required for a number of decisions,
including:
--
Appointments to the Board (the special shareholder can also make
appointments to the Board)
--
Setting (and approving any material changes in) the remuneration packages
of the Directors
--
Borrowing
--
Disposing of substantial assets of the business and shareholdings
--
Voluntary winding-up of the company
--
Varying certain of the company’s Articles of Association, including the rights
of the special shareholder.
• Note: The company is now in members’ voluntary liquidation and control of its
affairs has been passed to the Joint Liquidators.

Annual report and accounts 2018-19
168
Body in which Share is held
and type and value of Share
Significant terms of Shareholding
Post Office Limited (“POL”)
£1 Special Rights Redeemable
Preference Share
• Created in April 2012
• Special Shareholder is entitled to attend and speak at any general meeting or
any meeting of any other class of shareholders of POL, but the Special Share
does not carry voting rights or any other rights at any such meeting.
• It may be redeemed at any time by the Special Shareholder. POL cannot
redeem the Special Share without prior consent of the Special Shareholder.
• The consent of the special shareholder is required for a number of decisions,
including:
--
Varying POL’s Articles of Association, including the rights of the special
shareholder;
--
Appointment or removal from office of any Director of POL;
--
Approval of (including material variations) Directors’ remuneration and terms
of employment;
--
Adoption of (and any material variation in) POL’s strategic plan;
--
Substantial alterations in the nature of the business carried on by POL;
--
Sale of material assets in the absence of which POL would not be able to
deliver its strategic plan;
--
Incurring of any borrowing exceeding pre-set limits as agreed with HM
Treasury;
--
Issuing or allotment of shares or granting of share rights in the company; and
--
Voluntary winding-up of the company or member of the group.
--
Any transaction which will result in a commitment or liability – either
individually or when taken together with related relevant transactions – of an
amount in excess of £50m
BAE Systems plc £1 Special
Rights Preference Share
• Created in 1985 (but subsequently amended).
• No time limit.
• Provides for a 15% limit on any individual foreign shareholding, or group of
foreign shareholders acting in concert, in the company.
• Requires a simple majority of the Board and the Chief Executive to be British.
• Requires any Executive Chairman to be British and, if both the Chairman and
Deputy Chairman are non-executives, requires at least one of them to be
British.
Rolls Royce Holdings plc
£1 Special Rights Non-Voting
Share
• Created in 1987 (but subsequently amended and transferred to Rolls-Royce
Holdings plc).
• No time limit.
• Provides for a 15% limit on any individual foreign shareholding, or group of
foreign shareholders acting in concert, in the company.
• Requires a simple majority of the Board to be British.
• Allows either the Chairman or the Chief Executive to be either an EU or US
citizen provided that the other is a British citizen.
• Provides for a veto over the material disposal of assets of the group.
• Provides for a veto for a proposed voluntary winding up.

Financial Statements
169
Body in which Share is held
and type and value of Share
Significant terms of Shareholding
EDF Energy Nuclear Generation
Group Limited (formerly British
Energy Group plc) £1 Special
Share
• British Energy Group plc Special Share created on 13 January 2005 and held
jointly by the Secretary of State for Business, Energy and Industrial Strategy
and the Secretary of State for Scotland.
• The consent of the Special Shareholder, which can only be refused on grounds
of national security (except in relation to an amendment to the company’s
Articles of Association), is required in respect of:
--
various amendments to the company’s Articles of Association;
--
any purchase of more than 15% of the company’s shares;
--
the issue of shares carrying voting rights of 15% or more in the company;
--
variations to the voting rights attaching to the company’s shares; and
the giving of consent in respect of the issue of shares by, the sale of shares in or
amendments to the Articles of Association of various subsidiaries in certain cases.
British Energy Bond Finance
plc (formerly British Energy
Holdings plc) £1 Special Share
• British Energy Holdings plc Special Share created on 13 January 2005 and
held jointly by the Secretary of State for Business, Energy and Industrial
Strategy and the Secretary of State for Scotland.
• The consent of the Special Shareholder, which can only be refused on grounds
of national security (except in relation to an amendment to the company’s
Articles of Association), is required in respect of:
--
various amendments to the company’s Articles of Association; and
the giving of consent in respect of the issue of shares by, the sale of shares in
or amendments to the Articles of Association of various subsidiaries in certain
case.
EDF Energy Nuclear Generation
Limited (formerly British Energy
Generation Ltd) £1 Special
Share
• British Energy Generation Ltd Special Share created in 1996 is held solely by
the Secretary of State for Business, Energy and Industrial Strategy.
• The consent of the Special Shareholder, which can only be refused on grounds
of national security (except in relation to an amendment to the company’s
Articles of Association), is required in respect of:
--
various amendments to the company’s Articles of Association;
--
the disposal of any of the nuclear power stations owned by the company;
and
--
prior to the permanent closure of such a station, the disposal of any asset
which is necessary for the station to generate electricity.
British Energy Ltd (formerly
British Energy plc) £1 Special
Share
• British Energy plc Special Share created in 1996 is held solely by the Secretary
of State for Business, Energy and Industrial Strategy.
• The consent of the Special Shareholder, which can only be refused on grounds
of national security (except in relation to an amendment to the company’s
Articles of Association), is required in respect of:
--
various amendments to the company’s Articles of Association; and
--
the giving of consent in respect of the issue of shares by, the sale of shares
in or amendments to the Articles of Association of various subsidiaries in
certain cases.
• The company has no significant assets or liabilities as a result of the
restructuring scheme, which came into effect on 14 January 2005.

Annual report and accounts 2018-19
170
Body in which Share is held
and type and value of Share
Significant terms of Shareholding
Nuclear Liabilities Fund Ltd
£1 Special Rights Redeemable
Preference Share
• Created in 1996.
• The Secretary of State for Business, Energy and Industrial Strategy has a
Special ‘A’ Share (there is also a ‘B’ Share held by British Energy).
• The consent of the Special Shareholder is required for any of the following:
--
to change any of the provisions in the Memorandum of Association or
Articles of Association;
--
to alter the share capital or the rights attached thereto;
--
the company to create or issue share options;
--
the ‘B’ Special Shareholder or any of the Ordinary shareholders to dispose
or transfer any of their rights in their shares;
--
the company to pass a members voluntary winding-up resolution;
--
the company to recommend, declare or pay a dividend;
--
the company to create, issue or commit to give any loan capital;
--
the company to issue a debenture; or
--
the company to change its accounting reference date.
10.5 Membership Fund
The Secretary of State for Business, Energy and Industrial Strategy has a share in the membership
fund of the Carbon Trust. The members’ fund at 31 March 2019 was £nil (31 March 2018: £nil).
11 Other financial assets
31 March 2019
31 March 2018
Note
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Balance at 1 April
1,170
4,336
1,485
4,083
IFRS 9 adjustments
-
(429)
-
-
Revised balance at 1 April
1,170
3,907
1,485
4,083
Additions
25
1,176
17
839
Repayments
(236)
(1,152)
(284)
(605)
Effective interest
29
29
39
39
Unwinding of discount
-
2
-
-
Amortisation
-
-
-
(1)
Revaluations
212
182
(83)
23
Impairments
(4)
(69)
(4)
(57)
Impairment reversals
-
23
-
14
Balance at 31 March
1,196
4,098
1,170
4,336
Comprising:
Repayable launch investments
11.1
1,058
1,058
1,047
1,047
Other loans and investments
11.2
138
3,040
123
3,289
Balance at 31 March
1,196
4,098
1,170
4,336

Financial Statements
171
Other financial assets analysed between current and non-current assets:
31 March 2019
31 March 2018
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Due within twelve months
-
-
142
142
Due after twelve months
1,196
4,098
1,028
4,194
Total
1,196
4,098
1,170
4,336
11.1 Repayable launch investments
31 March 2019
31 March 2018
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Balance at 1 April
1,047
1,047
1,205
1,205
Repayments
(230)
(230)
(103)
(103)
Effective interest
29
29
39
39
Revaluations
212
212
(94)
(94)
Balance at 31 March
1,058
1,058
1,047
1,047
Repayable Launch Investments (RLI) are held by the core Department.
The core Department has determined that RLI are classified as ‘fair value through profit or loss
financial assets’ in accordance with IFRS 9. Fair value gains and losses are therefore recognised
directly in the SoCNE. In 2017-18, before the Departmental Group’s adoption of IFRS 9, they were
classified as ‘available for sale financial assets’, under IAS 39 with fair value movements recognised in
Other Comprehensive Income, rather than the SoCNE.
The core Department, under the provisions of the 1982 Civil Aviation Act, provides repayable launch
investment to companies to fund a proportion of the non-recurring eligible design and development
capital costs on civil aerospace development products. Each product supported is covered by
separate contractual terms and conditions. Under these contracts, periodic repayments become due
when products are delivered or at other specific points. The portfolio of investments is valued twice
annually and the valuations are based on forecast annual income arising under each contract.
Measurement and carrying values
RLI contracts are initially recognised at fair value which is the transaction price. After initial recognition,
the value is the discounted forecast value of future income streams, excluding accrued income
which is included in receivables when products are delivered. The value of future income streams
is predominantly driven by the core Department’s view of the applicable programme’s performance
in the global market over the period of the contract’s life; a number of activities inform this view and
some are described below.
The core Department uses a variety of sources to inform a forecast of deliveries for individual
programmes. This can include using: an internal delivery forecast model and market share model,
forecast delivery schedules and other data directly provided from the RLI recipient companies,
publicly available aircraft delivery forecasts, specifically commissioned consultant programme
forecasts as well as commentary and views from industry experts.
The approach taken is entirely dependent on the programme in question.
Other valuation variables include inflation measures – or proxies (such as RPI, RPIX, gilt rates and
GDP deflators). Some contracts entitle the core Department to a share of aircraft or engine spare

Annual report and accounts 2018-19
172
part and support income, and the valuation of these contracts is based on analysis of past income
streams and forecasts of future demand. The forecast income streams are adjusted by inflation of
2.6% and then are discounted to present value using a constant discount rate of 3.5% representing
the effective rate of return of the investment portfolio.
The carrying value of RLI is influenced by the interaction of key drivers such as aircraft or engine
deliveries and economic variables. The core Department uses Monte-Carlo simulation to understand
the effect of different scenarios for these drivers on the valuation of each contract. The core
Department considers that the carrying value is a reasonable approximation of the fair value of RLI.
The carrying value of the investments derived from the discounted cash flow model at 31 March 2019
was £1,058 million (31 March 2018: £1,047 million). The historic cost, including repayments to date
and excluding accrued income, of the portfolio at 31 March 2019 was £389 million (31 March 2018:
£527 million).
Sensitivity analysis
The core Department has developed a Monte-Carlo based approach which uses the software
package @Risk to assess the impact of uncertainty on forecast income, overall contract values,
and enhance the robustness of the valuation process. Uncertainties are addressed by constructing
different scenarios for the key drivers and then assigning probabilities to these scenarios to implement
a Monte-Carlo simulation of the contracts on a contract-by-contract basis. The key variables include:
programme development delays, changes to entry into service and out of service dates, production
levels, market shares and economic variables used as inflation measures.
The contracts are highly complex and generally distinct from each other in their terms and
structure, yet there are cases of significant interdependencies between contracts and correlations
between variables.
The model is iterated ten thousand times to produce distributions of income for each contract and
thus the overall portfolio. Each iteration of the model produces an income forecast. These are collated
and used to form an income distribution. It is from this distribution that the value of the portfolio
is calculated.
In order to give an assessment of potential volatility for the portfolio, we calculate the 5th and 95th
percentiles from the income distribution - 90% of all the iterations outputted from the Monte-Carlo
simulation lie between these particular percentile points. The lower (5th) and upper (95th) points which
define this interval were £1,004 million and £1,090 million respectively, at 31 March 2019 (2017-18:
£999 million and £1,076 million).
Risk
Market Risk
This constitutes the largest area of potential risk in the portfolio as the primary method of the
calculation of income streams is based on the forecasts of aircraft or engine deliveries. The core
Department uses internal analysis, company information and third-party information to forecast
deliveries and ultimately future income on each investment over the life of the investment period.
Deliveries in the short term are driven by variables which include manufacturer production plans,
market cycles, customer demand and availability of financing. Medium and longer-term deliveries
will be affected by overall market growth and the market attractiveness of an aircraft programme. A
negative shift in outlook may result in the core Department not being able to recover its investment
in whole or in part, although once deliveries have commenced some level of income is usually due to
the core Department. The core Department aims to minimise risk of under-recovery of investments by
carrying out a full evaluation of each business case submitted for launch investment support, and by
monitoring programmes for the substantive life of the contracts to allow it to assess exposure to risks
(including project risk, market risk and technical risk).

Financial Statements
173
Interest Rate Risk
A number of the contracts use retail price indexes (such as RPI and RPIX) or other surrogates as
a tool to inflate the value of income due to the core Department over time. As such there is a risk
relating to the forecasting of these indexes and surrogates within the valuation, although we estimate
that the risk is relatively low and the overall impact relatively minor.
Foreign Exchange Risk
The core Department has a small number of contracts which may deliver a US Dollar denominated
income in their later stages which would be translated into pounds sterling. We assess these income
streams as relatively low value, thus exchange rate risk exists but is minimal in the context of the
overall portfolio.
Credit Risk
Company failure could result in the core Department’s investment not being recovered in whole or
in part. The core Department seeks to offset this low probability risk by analysing the financial health
of any applicant at the time of application for launch investment and reviewing financial health as
part of the programme monitoring activity. In addition, contracts aim to contain provisions which will
(as a minimum) not disadvantage the core Department compared to other creditors in the event of
a corporate failure. The core Department takes steps to monitor the payments that become due to
companies under launch investment contracts to ensure they comply with the terms of the contracts.
Finally, the contracts also require the company’s auditors to confirm that all payments have been
made correctly and to identify any errors made.
Other Risk
The core Department’s investments are exposed to wider risks such as economic downturns or
market shocks from natural or non-natural events. These risks may adversely impact the value and
timing of the income received by the core Department. The core Department seeks to manage this
risk by actively monitoring such events when they arise to assess any potential impact.

Annual report and accounts 2018-19
174
11.2 Other loans and investments
Gilts and
bonds
Term
deposits
Private
sector
loans
Property
related
holdings
Private
sector
shares
Equities
(listed
securities)
Private
equities
Investment
funds
Other
investments
Total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Balance at 1 April 2017
46
14
423
65
-
266
443
1,245
376
2,878
Additions
12
-
306
-
-
-
7
299
215
839
Redemptions
-
-
(111)
(23)
-
(18)
(98)
(220)
(32)
(502)
Revaluations
1
-
(3)
-
-
21
(35)
23
110
117
Impairments
-
-
(17)
-
-
-
-
(40)
-
(57)
Impairment reversals
-
-
-
-
-
-
-
14
-
14
Balance at 31 March 2018
59
14
598
42
-
269
317
1,321
669
3,289
IFRS 9 adjustment - transfers between
categories
-
-
61
(42)
99
(269)
(317)
544
(76)
-
IFRS 9 adjustment - Other
(1)
-
2
-
-
-
-
31
(461)
(429)
Revised balance at 1 April 2018
58
14
661
-
99
-
-
1,896
132
2,860
Additions
8
-
391
-
108
-
-
660
7
1,174
Redemptions
(25)
(1)
(228)
-
(24)
-
-
(616)
(28)
(922)
Revaluations
-
-
-
-
(16)
-
-
28
(43)
(31)
Unwinding of discount
2
-
-
-
-
-
-
-
-
2
Impairments
-
-
(63)
-
(3)
-
-
-
-
(66)
Impairment reversals
-
-
23
-
-
-
-
-
-
23
Loans provided for in year
-
-
-
-
-
-
-
-
-
-
Balance at 31 March 2019
43
13
784
-
164
-
-
1,968
68
3,040
Of the total:
Core Department and Agencies
-
-
2
-
46
-
-
90
-
138
NDPBs and other designated bodies
43
13
782
-
118
-
-
1,878
68
2,902
Balance at 31 March 2019
43
13
784
-
164
-
-
1,968
68
3,040

Financial Statements
175
Core Department
Investment Funds
Investment funds are classified as ‘fair value through profit or loss’ (FVTPL) financial assets and are
measured at fair value in accordance with IFRS 9. Fair value gains and losses are recognised directly
in the SoCNE. In 2017-18 prior to the adoption of IFRS 9, they were classified as ‘available for sale
financial assets’ and measured at fair value in accordance with IAS 39 with fair value movements
recognised in Other Comprehensive Income, rather than the SoCNE.
After initial recognition, the fair value is based upon the valuations prepared by the fund managers.
They are taken from the most recent set of annual accounts for each of the funds and, where
available, updated with interim fund manager valuations. These investments support private sector
led venture capital to stimulate private investment into early stage small and medium-sized enterprise
(SME) businesses.
NDPBs and other designated bodies
Gilts and Bonds
The Nesta Trust holds investments in bonds. The investments in corporate bonds are measured at
‘amortised cost’ in accordance with IFRS 9. In 2017-18, prior to the adoption of IFRS 9, under IAS 39,
they were classified as ‘available-for-sale financial assets’, and measured at fair value based on market
quotes (31 March 2018: £59 million).
Private sector loans
British Business Bank (BBB), Fleetbank Funding Ltd (FFL) and UK Research and Innovation (UKRI)
have entered into loan agreements with parties within the private sector. The loans within the
Departmental Group are carried at historic cost as a proxy for amortised cost because the NDPBs
and other designated bodies have determined that there is no material difference between historical
cost and amortised cost. As part of the review undertaken on financial instruments on transition to
IFRS 9, it was identified that £61million of financial instruments held by BBB that were disclosed as an
investment fund, and would be more appropriately disclosed as a private sector loan. The balance at
31 March 2018, has been transferred to the Private Sector Loan category. Remeasurement of the loan
value including related expected credit losses has led to an adjustment on adoption of IFRS 9 of
£2 million to BBB’s private sector loans.
As at 31 March 2019, £784 million of loans were held by NDPBs and other designated bodies (31
March 2018: £598 million).
The value of loans held by BBB as at 31 March 2019 was £432 million (31 March 2018: £397 million).
The conditions attached to each loan vary depending on the details of the arrangement. Repayment
schedules have been agreed and all loans are expected to be repaid at the end of the loan term.
During the reporting period BBB made loans of £26 million (31 March 2018: £239 million) to private
companies through the BFP Small Business and Investment Programme schemes. BBB provides
invoice discount finance and peer to peer lending through the Investment Programme funds which
were valued at £233 million at 31 March 2019 (31 March 2018: £242 million).
During 2018-19, FFL made loans of £141 million (31 March 2018: £66 million) to private companies
through the Enable Loan Programme scheme. The value of loans held by FFL as at 31 March 2019
was £330 million (31 March 2018: £189 million).
Property related holdings
These holdings relate to a number of marketable real estate investment funds and were assessed
as part of the transition to IFRS 9 and transferred to the Investment Funds category within note 11.2.
These assets are measured at ‘fair value through profit and loss’ (FVTPL) in accordance with IFRS 9,
with their fair value movements recognised directly in the SoCNE. In 2017-18, prior to the adoption of
IFRS 9, under IAS 39, they were held as ‘available for sale financial assets’.

Annual report and accounts 2018-19
176
Private Sector Shares, Equities (listed securities) and Private equities
At 31 March 2019 the Departmental Group held £164 million of private sector shares. These were
held by BIS (Postal Services Act 2011) Company Ltd, Nesta Trust and UKRI. These are measured at
‘fair value through other comprehensive income’, with movements going through the statement of
taxpayers’ equity and other reserves.
Private Sector shares were split between listed securities and private equities as at 31 March
2018. Following the IFRS 9 review, reclassification between categories has been made to ensure a
consistent disclosure. In particular, £39 million of listed securities and £3 million of private equities
were transferred into private sector shares, with the remainder £544 million (made up of £230 million
Equities (listed securities) and £314 million Private Equities) being transferred to investment funds. In
addition, £25 million was reclassified from Other investments to Private Sector shares and £32 million
was reclassified from investment funds, relating to holdings in private sector shares.
The fair values are estimated based on a variety of valuation techniques, adopted by the investment
managers that comply with the International Private Equity and Venture Capital (PEVC) Valuation
Guidelines or the valuation guidelines produced by the British Venture Capital Association (BVCA).
Valuation techniques used include the use of earnings multiples, discounted cash flows analysis, and
net asset values.
Investment Funds
BBB, Nesta Trust, BIS (Postal Services Act 2011) Company Limited, Northern Powerhouse Investment
Limited and Midlands Engine Investments Limited hold investment funds. The value invested at
31 March 2019 was £1,968 million (31 March 2018: 1,321 million). In accordance with IFRS 9, the
investments are measured at ‘fair value through profit or loss’ with fair value movements going
directly to the SoCNE. In 2017-18, prior to the adoption of IFRS 9, under IAS 39 they were classified
as ‘available-for-sale financial assets’ with fair value movements recognised in Other Comprehensive
Income. As part of the implementation review for IFRS 9, it was identified that financial investments
of £42 million previously disclosed as Property, Related Holdings, £230 million previously disclosed
as Equities (listed securities), £314 million previously disclosed as Private equites and £50 million
previously disclosed as Other investments, were reclassified as Investments Funds which better
represent their nature. £61 million was transferred out of investment funds to private sector loans, and
£31 million was transferred out into private sector shares.
BBB held investment funds valued at £1,281 million at 31 March 2019 (31 March 2018: £1,195 million).
The most significant investment is in the Business Finance Partnership (BFP) for medium sized
businesses at 31 March 2019, this was valued at £435 million (31 March 2018: £551 million). The BFP
aims to increase the supply of capital through non-bank lending channels and, in the longer term,
to help to diversify the sources of finance available to businesses. BBB also has an investment fund
in Enterprise Capital Funds which were valued at £222 million at 31 March 2019 (31 March 2018:
£182 million).
The fair value of the investments in BIS (Postal Services Act 2011) Company Ltd as at 31 March 2019
was £254 million (31 March 2018: £305 million). These investments primarily comprised investments in
European and North American unquoted shares.
Under IFRS 9, embedded derivatives are no longer assessed separately from the host instrument,
leading to the transfer of BBB’s £31 million of embedded derivatives to the investment fund category,
prior to the adoption of IFRS 9, under IAS 39 this was disclosed as a Derivative.
Other Investments
Other investments includes UK Green Infrastructure Platform Ltd investments which are classified
as ‘fair value through profit and loss’ in accordance with IFRS 9. The fair value of these investments
as at 31 March 2019 was £68 million (31 March 2018: £132 million). Investments included within this
category as at 31 March 2018 were assessed under IFRS 9 and transferred to more appropriate
categories accordingly.

Financial Statements
177
12 Recoverable contract costs
The Group has commercial agreements in place under which some or all of the expenditure required
to settle nuclear provisions will be recovered from third parties. Net recoverable costs at 31 March
2019 were £1,620 million (31 March 2018: £3,346 million).
Recoverable contract costs relating to
nuclear provisions
Departmental Group
Departmental Group
31 March 2019
31 March 2018
restated
£m
£m
Gross recoverable contract costs
5,046
7,081
Less applicable payments received on account
(3,092)
(3,192)
Less associated contract loss provisions
(334)
(543)
Balance at 31 March
1,620
3,346
The Gross recoverable contract costs disclosed in the BEIS 2017-18 Annual Report and Accounts
has been restated to be align with the Nuclear Decommissioning Authority’s disclosure. This has
increased the Gross recoverable contract costs by £292 million and increased the amount deducted
from the associated contract loss provision of (£292) million. This is solely a disclosure adjustment, as
BEIS discloses the net position for Recoverable contract costs, Nuclear decommissioning provision,
Contract loss provision (Note 19) and Payments received on account disclosed in Trade and other
receivables, which are unaffected by the disclosure change as the net values were correctly reported
in the BEIS 2017-18 Annual Report and Accounts.
The above balances relate to the Nuclear Decommissioning Authority. The movements in gross
recoverable contract costs during the year were:
Departmental Group
Departmental Group
31 March 2019
31 March 2018
restated
£m
£m
Gross recoverable contract costs at 1 April
7,081
6,885
Increase/(decrease) in year
(1,510)
764
Unwinding of discount
(83)
(49)
Release in year - continuing operations
(276)
(291)
Amortisation of recoverable contract costs
(166)
(228)
Gross recoverable contract costs at 31 March
5,046
7,081
The gross balance of recoverable contract costs of £5,046 million (31 March 2018 restated:
£7,081 million) comprises £1,617 million (31 March 2018: £1,783 million) of past costs which were
incurred before the revenue recognition period of the related contracts and will be amortised in future
years in line with revenue and £3,429 million (31 March 2018 restated: £5,298 million) of probable
future costs which form part of the nuclear decommissioning provision (Note 19) and will be released
as they are incurred. Further details are published in the NDA’s accounts.

Annual report and accounts 2018-19
178
The movement in the gross recoverable contract costs during the year broken down by the type of
costs are detailed in the table below:
Departmental Group
Departmental Group
2018-19
2017-18
Historic costs
Future costs
Total costs
Historic costs
Future costs
Total costs
£m
£m
£m
£m
£m
£m
Balance at
1 April
1,783
5,298
7,081
2,011
4,874
6,885
Increase in the
year
-
(1,510)
(1,510)
-
764
764
Unwinding of
discount
-
(83)
(83)
-
(49)
(49)
Amortisation
(166)
-
(166)
(228)
-
(228)
Release in year
-
(276)
(276)
-
(291)
(291)
Balance at
31 March
1,617
3,429
5,046
1,783
5,298
7,081
The historic costs within the above are deemed contract assets under IFRS 15 ‘Revenue from
Contracts with Customers’. The opening balances, amortisation in period and closing balances for
each main contract type are:
Departmental Group
Departmental Group
2018-19
2017-18
Spent fuel
reprocessing
and
associated
waste
management
Spent fuel
receipt and
management
Total
Spent fuel
reprocessing
and
associated
waste
management
Spent fuel
receipt and
management
Total
£m
£m
£m
£m
£m
£m
Balance at
1 April
1,162
621
1,783
1,358
653
2,011
Amortisation
(136)
(30)
(166)
(196)
(32)
(228)
Balance at
31 March
1,026
591
1,617
1,162
621
1,783
Contract assets under IFRS15 are deemed financial instruments for the purposes of IFRS 9 ‘Financial
Instruments’ and, therefore, are ordinarily required to be reviewed for expected credit loss impairment.
The above contract asset balances comprise costs which have been previously incurred and are now
being amortised in each reporting period. They are matched in full by payments on account and,
therefore, a credit loss impairment is not required.

Financial Statements
179
13 Investments in Joint Ventures and Associates
31 March 2019
31 March 2018
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Balance at 1 April
-
367
-
347
Opening balance transfer of investments
-
461
-
-
Revised balance at 1 April
-
828
-
347
Additions
-
37
-
7
Dividends
-
(87)
-
-
Disposals
-
-
-
(1)
Profit/(Loss)
-
186
-
1
Impairments
-
(1)
-
-
Revaluations
-
76
-
13
Balance at 31 March
-
1,039
-
367
NDPBs and other designated bodies
The Francis Crick Institute Limited
United Kingdom Research and Innovation (UKRI) and United Kingdom Atomic Energy Authority
(UKAEA) have joint ventures and/or associates. The most significant holding is the Francis Crick
Institute Limited (the Crick).
The Crick was established in 2010 to deliver a world class interdisciplinary biomedical research
centre. UKRI holds 42% (31 March 2018: 42%) of the ordinary shares in the Institute. The remaining
shares are held by Cancer Research UK, University College London, the Wellcome Trust, Kings
College London and Imperial College of Science, Technology and Medicine. The Institute became
fully operational in 2016-17 following the completion of the Crick building. Accordingly, the value of
the Departmental Group’s investment at 31 March 2019 is £304 million (31 March 2018: £254 million),
reflecting Departmental Group’s share of net assets. This includes a £48 million upwards revaluation
adjustment in 2018-19 (2017-18: £nil million) which aligns the Crick’s property, plant and equipment
accounted for under the `historic cost’ model to the Departmental Group’s revaluation model.
The principal place of business is Midland Road, London.
The results of the Crick are summarised below:
Summarised financial information
2018-19
£m
2017-18
£m
Current assets
85
52
Non-current assets
559
580
Current liabilities
(34)
(26)
Revenue
153
146
Profit/(loss) from continuing activities
4
(28)
Other financial information
2018-19
£m
2017-18
£m
Cash and cash equivalents
34
39
Depreciation and amortisation
(39)
(40)
Capital commitments
4
4

Annual report and accounts 2018-19
180
NDPBs and other designated bodies
Reclassification of URENCO
All investment classifications and accounting judgements have been re-assessed as part of the
adoption of IFRS 9 in 2018-19, and this includes the Department’s 33% ordinary share holding in
URENCO through Enrichment Holdings Limited (EHL). As a result of the re-assessment, URENCO has
been reclassified as an associate from 1 April 2018 at a value of £456 million, with the Department’s
share of dividends, profit, and revaluation in 2018-19 being £87 million, £151 million and £31 million
respectively. The department’s holding is valued at £551 million. For further details on the changes to
the disclosure of income related to URENCO, see note 6.2.
The principal place of business is Bells Hill, Stokes Poges, Buckinghamshire.
Summary financial information
2018-19
£m
Current assets
804
Non-current assets
4,846
Current liabilities
(351)
Non-current liabilities
(3,646)
Revenue
1,732
Profit/(loss) from continuing activities
452
Other financial information
2018-19
£m
Cash and cash equivalents
216
Current financial liabilities (excl trade and other payables and provisions)
(30)
Non-current financial liabilities (excl trade and other payables and provisions)
(1,848)
Depreciation and amortisation
(284)
Amortisation of intangible assets
(7)
Interest income
61
Interest expense
(155)
14 Trade and other receivables
31 March 2019
31 March 2018
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Amounts falling due within one year:
Trade receivables
109
743
97
433
Other receivables:
VAT and other taxation
22
144
20
133
Staff receivables
2
3
1
2
RPS receivables
57
57
128
128
Other
143
184
196
262
Contract Assets
6
38
-
-
Prepayments and accrued income
108
399
102
385
447
1,568
544
1,343
Amounts falling due after more than
one year:
Trade receivables
9
59
17
75

Financial Statements
181
31 March 2019
31 March 2018
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Other receivables
804
833
915
968
Contract Assets
-
5
-
-
Prepayments and accrued income
-
41
-
47
813
938
932
1,090
Total receivables at 31 March
1,260
2,506
1,476
2,433
Other receivables held by the core Department include a discounted receivable of £920 million (31
March 2018: £1,033 million) relating to the Government guarantee of certain benefits payable to
members and beneficiaries of the Mineworkers’ Pension Scheme made after privatisation of the
British Coal Corporation in 1994. The undiscounted amount is £1,058 million. The agreement relating
to the guarantee entitles the Government to a portion of any periodic valuation surpluses, generally
determined by the Government Actuary following triennial valuations, the most recent valuation was
at 30 September 2017. The receivables have been classified as Amortised Cost assets in accordance
with IFRS 9: Financial Instruments. In accordance with IFRS 9 the receivable is initially recognised
at fair value which equates to the future cash flows being discounted at HM Treasury’s financial
instrument nominal rate of 3.7%. Income of £475 million was recognised in 2018-19 (2017-18:
£742 million) in relation to an additional sum receivable from the September 2017 valuation (note 6.1).
A contingent asset in relation to a similar financial guarantee for the British Coal Staff Superannuation
Scheme is disclosed in note 25. More information about the pension schemes can be found at
http://www.mps-pension.org.uk and https://www.bcsss-pension.org.uk.
From 1 April 2018, the responsibility for the Redundancy Payment Service (RPS) was transferred from
the core Department to the Insolvency Service (INSS). This was accounted for in accordance with the
FReM as a Transfer by Absorption, where the carrying value of the RPS Receivable on 1 April 2019
was transferred to INSS. The RPS debtor was transferred out of the core Department in to INSS and
as the income and expenditure from 1 April 2018 is incurred by INSS, the comparatives for the core
Department have not been restated in line with the FReM guidance for a Transfer by Absorption. The
Redundancy Payment Service (RPS) receivable is shown net of an annual impairment.
The impairment is calculated by the Insolvency Service using a model which is approved by HMRC.
The model calculates the recoverable debt as £57 million as at 31 March 2019 (31 March 2018:
£128 million). Previously the rate of recoverability was estimated at 14%. It was recognised that there
was a risk that this was over-optimistic and therefore could result in a downward revision in future
years. In line with IFRS 9, RPS debts have been grouped into similar types, in this case they have been
grouped between preferential or non-preferential debts. Analysis of historic trends of recovery of these
types of debts has revealed that the best estimate of recovery is 5.5% for non-preferential, and 40.7%
for preferential, as opposed to the overall 14% previously utilised.

Annual report and accounts 2018-19
182
15 Non-current assets and liabilities held for sale
31 March 2019
31 March 2018
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Balance of assets at 1 April
-
15
1,517
2,609
Additions and reclassifications
-
-
50
(12)
Disposals
-
-
(1,567)
(2,582)
Revaluations
-
5
-
-
Carrying amount of assets at 31 March
-
20
-
15
Balance of liabilities at 1 April
-
-
-
(1,000)
Disposals
-
-
-
1,000
Carrying amount of liabilities at
31 March
-
-
-
-
Carrying amount of net assets at
31 March
-
20
-
15
The 2017-18 disposal related to the sale of the core Department’s shareholding in Green Investment
Bank (GIB) to Macquarie Group Limited for £1,753 million, against a carrying value of £1,567 million,
resulting in a profit on disposal of £186 million, which is disclosed on the face of the Statement of
Comprehensive Net Expenditure in the core Department.
In the Departmental Group, the net assets at the date of disposal were £1,561 million, resulting
in a profit on disposal of £202 million. Further details of the sale can be found in last year’s
financial statements.
No new assets or liabilities have been held for sale in 2018-19.
16 Investments and loans in public sector bodies: current
31 March 2019
31 March 2018
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Balance at 1 April
732
732
682
682
Additions
6,240
6,240
7,198
7,198
Repayments
(6,369)
(6,369)
(7,168)
(7,168)
Loans repayable within 12 months transferred
from non-current assets
63
17
20
20
Balance at 31 March
666
620
732
732
The most significant item included above is a loan facility to Post Office Limited (POL). Since October
2003 the core Department has made available to POL a revolving loan facility of up to £950 million.
This is to help the company fund its daily in-branch working capital requirements to deliver services
through the network, such as social benefits payments and access to cash. The facility was due to
mature in March 2018 but was extended to run until 31 March 2021. The outstanding balance at 31
March 2019 was £565 million (31 March 2018: £644 million) which is included in the £666 million (31
March 2018: £732 million) above.

Financial Statements
183
17 Cash and cash equivalents
31 March 2019
31 March 2018
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Balance at 1 April
1,246
2,034
1,192
1,819
Net change in cash and cash equivalent
balances
37
54
54
215
Balance at 31 March
1,283
2,088
1,246
2,034
The following balances at 31 March
were held at:
The Government Banking Service (GBS)
1,282
1,828
1,244
1,818
Commercial banks and cash in hand
1
260
2
216
Balance at 31 March
1,283
2,088
1,246
2,034
18 Trade payables and other liabilities
31 March 2019
31 March 2018
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Amounts falling due within one year:
VAT, social security and other taxation
10
108
7
102
Trade payables
79
195
14
461
Other payables
552
1,020
68
365
Contract Liabilities
5
474
-
-
Other accruals and deferred income
979
2,569
948
2,779
Amounts issued from the Consolidated Fund
for supply but not spent at year end
1,280
1,280
928
928
Advances from Contingencies Fund
-
-
2
2
Consolidated Fund Extra Receipts due to be
paid to the Consolidated Fund:
Received
3
6
316
317
2,908
5,652
2,283
4,954
Amounts falling due after more than
one year:
Trade Payables
-
7
-
-
Contract Liabilities (see note 18.1)
-
1,691
-
-
Other payables, accruals and deferred
income
1,141
1,203
1,203
2,901
1,141
2,901
1,203
2,901
Total payables at 31 March
4,049
8,553
3,486
7,855

Annual report and accounts 2018-19
184
18.1 Contract Liabilities
31 March 2019
Core
Department
and Agencies
Departmental
Group
£m
£m
Balance at 1 April
-
-
IFRS 15 Adjustment to opening balances
-
2,290
Revised balance at 1 April
-
2,290
Additions
5
703
Release to SOCNE
-
(828)
Balance at 31 March
5
2,165
Of which:
Due within 1 year
5
474
Due in over 1 year
-
1,691
Balance at 31 March
5
2,165
Included under accruals and deferred income are:
Core Department
Promissory note liabilities with maturities of less than one year of £284 million (31 March 2018:
£276 million) and with maturities greater than one year of £1,140 million (31 March 2018: £1,202 million)
which represent amounts owed for various ODA (Official Development Assistance) programmes to
which the core Department has contributed.
During the year the British Business Bank (BBB) loaned the £600 million (2017-18; nil million) un-
invested portion of its loan from the Nuclear Liabilities Fund (NFL), £350 million in August 2018 and
a further £250 million in December 2018, to the core Department. £75 million of the loan was repaid
before the year end. The remaining balance of £525 million is held in Other payables due within one
year. Since it is an intercompany transaction, it is eliminated from the Departmental Group balance.
See more detail on the NLF loan in the narrative for NDPBs and other designated bodies that follows.
NDPBs and other designated bodies
The majority of contract liabilities are the sums received on account by the Nuclear Decommissioning
Authority relating to income from long term contracts to be recognised within one year of £461 million
(31 March 2018: £680 million) and after one year of £1,691 million (31 March 2018: £1,594 million);
more details are available in the accounts of the Nuclear Decommissioning Authority.
Included in Other payables due within one year in the table above is a loan to BBB from the Nuclear
Liabilities Fund (NLF). In August 2018 BBB received a loan from the NLF, a non-consolidated public
corporation of the Departmental Group. The purpose of this is for the NLF to achieve a higher rate of
return than it has on its investments in the National Loan Fund in previous years. The carrying amount
of the borrowing from NLF as at 31 March 2019 was £604 million (31 March 2018: £nil million).

Financial Statements
185
19 Provisions for liabilities and charges
31 March 2019
31 March 2018
Note
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Current liabilities:
Not later than one year
260
3,050
278
3,332
Total current liabilities
260
3,050
278
3,332
Non-current liabilities:
Later than one year and not later than
five years
883
12,235
944
12,963
Later than five years
1,037
119,181
1,232
224,640
Total non-current liabilities
1,920
131,416
2,176
237,603
Total at 31 March
2,180
134,466
2,454
240,935
Total provisions
Nuclear
19.1
1,346
131,094
1,412
235,101
Other
19.2
834
3,372
1,042
5,834
Total at 31 March
2,180
134,466
2,454
240,935
The provision liabilities in tables 19.1 and 19.2 below have been discounted to present value
using discount rates as provided by HM Treasury who have required a change in the approach to
discounting as at 31 March 2019 compared to prior years. Discounting as at 31 March 2018 was
applied to real forward cash flows at constant prices as at that date. Discounting as at 31 March 2019
has been applied to nominal cash flows which include allowance for future inflation using a forecast
of consumer price inflation provided by HM Treasury except where a more appropriate forecast
has been identified for specific provisions. The impact of the change in the discounting approach is
included in the “Change in discount rate” movement of provisions.
31 March 2019
31 March 2018
Nominal
discount rate
Inflation rate
Equivalent real
discount rate
Real discount
rate
Cash outflows expected within two years
0.76%
2.0%
(1.22%)
(2.42%)
Cash outflows expected between two and
five years
0.76%
2.1%
(1.31%)
(2.42%)
Cash outflows expected between five and
ten years
1.14%
2.1%
(0.94%)
(1.85%)
Cash outflows expected after ten years
1.99%
2.1%
(0.11%)
(1.56%)
Allowances for future inflation and discounting can impact on reported liabilities significantly;
uninflated, undiscounted equivalent values are provided in the descriptions of the provisions below to
illustrate the effect.

Annual report and accounts 2018-19
186
19.1 Nuclear provisions
British
Energy
UK Atomic
Energy Authority
Decommissioning
Core Department
and Agencies Total
NDA
Decommissioning
Contract loss
Departmental Group
Total
£m
£m
£m
£m
£m
£m
Balance at 1 April 2017
1,286
306
1,592
163,135
521
165,248
Net amount deducted from recoverable contract costs
-
-
-
-
27
27
Unwinding of discount
(14)
(1)
(15)
(1,286)
(15)
(1,316)
Change in discount rate
(18)
1
(17)
71,002
-
70,985
Provided in the year
37
8
45
3,462
40
3,547
Recoverable contract cost release in year
-
-
-
(291)
-
(291)
Provisions utilised in the year
(193)
-
(193)
(2,740)
(166)
(3,099)
Balance at 31 March 2018
1,098
314
1,412
233,282
407
235,101
Net amount deducted from recoverable contract costs
-
-
-
-
209
209
Unwinding of discount
(17)
(5)
(22)
(3,615)
(15)
(3,652)
Change in discount rate
(4)
(33)
(37)
(95,969)
22
(95,984)
Provided in the year
25
146
171
(1,114)
(427)
(1,370)
Recoverable contract cost release in year
-
-
-
(276)
-
(276)
Provisions utilised in the year
(178)
-
(178)
(2,599)
(157)
(2,934)
Balance at 31 March 2019
924
422
1,346
129,709
39
131,094
Estimated forward discounted cash flows as at 31 March 2019
Not later than one year
160
2
162
2,735
-
2,897
Later than one year and not later than five years
455
126
581
11,149
7
11,737
Later than five years
309
294
603
115,825
32
116,460
Total forward cash flows as at 31 March 2019
924
422
1,346
129,709
39
131,094

Financial Statements
187
Core Department
British Energy
As a result of the restructuring of British Energy (BE) in January 2005, the Government assists BE
(now EDF Energy Nuclear Generation Limited) in meeting its contractual historic fuel liabilities. The
provision is based on the forecast payment schedule up to 2029 which is set out in the waste
processing contracts agreed between BE, BNFL and the department. The discounted liability at
31 March 2019 is £924 million (31 March 2018: £1,098 million). Payments are adjusted in line with
the Retail Prices Index and the liability includes allowance for future inflation using a forecast for the
Index from the Office for Budget Responsibility. The undiscounted liability at 31 March 2019, at prices
as at the reporting date so excluding the impact of future inflation, is £956 million (31 March 2018:
£1,022 million).
UK Atomic Energy Authority (UKAEA) Decommissioning
The decommissioning provision represents the estimated costs of decommissioning fusion research
facilities at UKAEA’s Culham site, including the storage, processing and eventual disposal of
radioactive wastes. The core Department retains the liability for these costs. Given that much of the
work will not be undertaken until well into the future, the provision involves an element of estimation.
In addition, the timing of expenditure is dependent on the closure date of the Joint European Torus
facility. The discounted liability at 31 March 2019 is £422 million (31 March 2018: £314 million) and
reflects a review during 2018-19 of the detailed Life Time Plan for decommissioning, drawn up in
2007-08. The undiscounted liability at 31 March 2019, at prices as at the reporting date so excluding
the impact of future inflation, is £402 million (31 March 2018: £273 million). The increase is mainly due
to changed requirements for waste preparation and packaging and additional project management
and other staffing costs.
NDPBs and other designated bodies
NDA Decommissioning
The NDA’s nuclear decommissioning liability represents NDA’s best estimate of the costs of
decommissioning plant and equipment on each of the designated nuclear licensed sites in
accordance with the published strategy.
The programme of decommissioning work will take until 2137 but, in preparing the estimate, the
NDA has focused in particular on the first 20 years which represent £50 billion out of the total £130
billion provision (31 March 2018: £56 billion out of £233 billion). The estimates are necessarily based
on assumptions about the processes and methods likely to be used to discharge the obligations
and reflect the latest technical knowledge, existing regulatory requirements, Government policy and
commercial agreements. Given the very long timescale and the complexity of the plants and material
being handled, considerable uncertainty remains in the cost estimate, particularly in the later years.
Discounting of the forward cash flow estimates to present value also has a significant impact on the
liability reported in the Statement of Financial Position of £130 billion at 31 March 2019 (31 March
2018: £233 billion). The undiscounted equivalent of this reported liability is £123 billion at 31 March
2019 (31 March 2018: £120 billion). The Group auditors continue to include an emphasis of matter
paragraph in their audit certificate concerning the overall measurement uncertainty.
The NDA has commercial agreements in place under which a portion of the expenditure required to
settle certain elements of the decommissioning provision are recoverable from third parties. Changes
in future cost estimates of discharging these particular elements are therefore matched by a change
in recoverable contract costs. In accordance with IAS 37, these recoverable amounts are not offset
against the decommissioning provision but are treated as a separate asset (note 12).

Annual report and accounts 2018-19
188
Sensitivity Analysis:
An increase of 0.5% in the discount rate would reduce the provision to £110 billion, whilst a decrease
in discount rate of 0.5% would increase the provision to £158 billion.
The change in discount rates (see note 1.23) in the current financial year produced a decrease of
£107,764 million (2018: £65,964 million increase). This figure excludes the change relating to inflation
plus the recoverable contract costs off-setting balance which otherwise result in a decrease of
£95,969 million.
Analysis of expected timing of discounted cash flows for the NDA Nuclear Provision is as follows:
Waste Research Sellafield
Fuel
Manufacturing
& Generation
Others
2018-19
Total
2017-18
Total
£m
£m
£m
£m
£m
£m
£m
Up to 1 year
77
257
1,911
420
70
2,735
2,855
2 to 5 years
328
1,051
8,127
1,311
332
11,149
11,557
6 to 20 years
2,354
1,883
30,408
1,165
595
36,405
41,442
21 to 50 years
3,907
208
33,343
806
488
38,752
62,942
50 years +
4,788
61
24,743
11,893
132
41,617
115,274
11,454
3,460
98,532
15,595
1,617
130,658
234,070
Deduction in respect of Site Licence Companies pension receivable from NDA
(949)
(788)
Total NDA Decommissioning Provisions
129,709
233,282
Waste Research Sellafield
Fuel M&G
Others
2018-19
Total
2017-18
Total
Sensitivity
£m
£m
£m
£m
£m
£m
£m
Increase
28,244
180
83,098
5,707
112
117,341
253,947
Reduction
(4,191)
(360)
(13,850)
(5,707)
(225)
(24,333)
(55,888)
The NDA calculates its provision based on management’s best estimate of the future costs of the
decommissioning programme, which is expected to take until 2137 to complete. The NDA also
considers credible risks and opportunities which may increase or decrease the cost estimate, but
which are deemed less probable than the best estimate. These are the basis of the sensitivities
identified above, and the key sensitivities are as follows:
• Waste activities cover the Low Level Waste Repository and the Geological Disposal Facility (GDF),
with the key sensitivities being in the timing and costs of constructing and operating the GDF. The
above range from a reduction of £4,191 million to an increase of £28,244 million and reflect three
separate sensitivities:
 The potentially higher costs of constructing and operating the GDF itself, which dependent on
the location and construction requirements of the facility, could be up to £25,144 million higher (or
£4,191 million lower) than the base case assumption
 The impact of the timing of the facility’s construction and operations. The current planned
date for the facility to receive waste is 2045. NDA has identified a risk that the construction and
opening of the facility may be delayed beyond 2045 (Further information on this can be found
in the Governance Statement of the NDA’s Annual Report and Accounts). A delay to this date
may increase the cost of the facility itself, along with the cost of interim storage of waste at sites
across the NDA estate. A delay of a small number of years is considered to be within the overall
tolerance of the estimate for GDF construction and waste transfer, and is not considered to have

Financial Statements
189
a material impact on the provision estimate. A longer delay of say 20 years could materially
impact the provision, by approximately £2,100 million.
 A delay of 20 years would not necessarily increase the underlying costs of the facility, but would
increase the discounted value of the estimate by approximately £1 billion due to the effect of long
term negative discount rates.
• Activities on the sites primarily used for research (Dounreay, Harwell, and Winfrith) are concerned
with final decommissioning of assets and site clearance. Sites will be cleared by 2080. Options
are being explored to accelerate site clearance, which in the case of Dounreay would reduce the
provision by £360 million; an increase in the cost and/or a delay of past the latest anticipated Interim
State date (2033) would increase the provision by up to £180 million.
• Sellafield represents activities associated with operation of the site, reprocessing and eventual
decommissioning, and includes all site overheads. Principal sensitivities are around the cost of
delivering the plan, particularly the costs of new construction, decommissioning and post operational
clean out (POCO) work in the long-term (beyond the next twenty years). The potential costs range
from a £13,850 million reduction against the current estimate, to a £83,098 million increase.
• fuel manufacturing and generation (which for this purpose includes Magnox and Springfields)
programme of work includes defueling the generating stations and preparing for interim Care and
Maintenance (complete by 2030) followed by a final site clearance phase around 2070 to 2107.
The main cost risk is in the final site clearance phase, which may increase costs by £5,707 million.
Conversely a reduction in the costs associated with this phase may reduce costs by £5,707 million.
Further details are reported in the Financial review on page 42 of the Annual Report and in the NDA
Annual Report and Accounts.
Contract loss
Contract loss provisions have been recognised by the Nuclear Decommissioning Authority to cover
anticipated shortfalls between total income and total expenditure on relevant long term contracts. The
amounts are disclosed net after deduction of amounts relating to recoverable contract costs (note 12).
The amount provided in the year for contract losses relates to changes in estimates of the costs of
existing contracts. The discounted liability at 31 March 2019 is £39 million (31 March 2018: £407 million).
Further detail, including movement on the gross provision, can be found in the accounts of the NDA.

Annual report and accounts 2018-19
190
19.2 Other provisions
Concessionary
fuel
British
Shipbuilders
Legacy
ailments
Onerous
leases
Other
Core and
Agencies
total
Coal
Authority
Early
departure
costs and
restructuring
Other
Departmental
Group total
£m
£m
£m
£m
£m
£m
£m
£m
£m
£m
Balance at 1 April 2017
433
198
131
113
119
994
2,818
121
332
4,265
Change in discount rate
28
12
3
(1)
5
47
1,485
-
62
1,594
Provided in the year
49
3
-
31
24
107
80
1
3
191
Provisions not required written back
-
-
(2)
-
(3)
(5)
(2)
(16)
15
(8)
Provisions utilised in the year
(42)
(11)
(7)
(15)
(16)
(91)
(26)
(20)
(2)
(139)
Unwinding of discount
(5)
(1)
(1)
(2)
(1)
(10)
(27)
(1)
(31)
(69)
Balance at 31 March 2018
463
201
124
126
128
1,042
4,328
85
379
5,834
IFRS 9 - transfer to loan
commitment liability note
-
-
-
-
-
-
-
-
(184)
(184)
Revised balance at 1 April 2018
463
201
124
126
128
1,042
4,328
85
195
5,650
Change in discount rate
(42)
(56)
(11)
(7)
(11)
(127)
(2,634)
-
(38)
(2,799)
Provided in the year
-
-
8
23
24
55
776
12
10
853
Provisions not required written back
(11)
(1)
-
-
(3)
(15)
(74)
(1)
(2)
(92)
Provisions utilised in the year
(40)
(7)
(18)
(27)
(14)
(106)
(28)
(16)
(4)
(154)
Unwinding of discount
(7)
(3)
(2)
(2)
(1)
(15)
(69)
(1)
(1)
(86)
Balance at 31 March 2019
363
134
101
113
123
834
2,299
79
160
3,372
Estimated forward discounted cash flows as at 31 March 2019
Not later than one year
37
8
13
23
17
98
27
17
11
153
Later than one year and not later
than five years
122
33
35
74
38
302
141
37
18
498
Later than five years
204
93
53
16
68
434
2,131
25
131
2,721
Total forward cash flows as at
31 March 2019
363
134
101
113
123
834
2,299
79
160
3,372

Financial Statements
191
Core Department
Concessionary fuel
The provision covers the cost of the core Department’s responsibility, arising from government
announced guarantees, to provide either solid fuel or a cash alternative to ex-miners formerly
employed by British Coal and their dependants and to certain former employees who lost their
entitlement as a consequence of the restructuring and run down of UK Coal in 2013 and 2015; it
includes administration costs. Of the total of 43,801 current beneficiaries at 31 March 2019, 37,505
have opted for the cash alternative at an average cost per beneficiary of £732 per annum; the average
annual cost of solid fuel for the remainder is £1,147 per beneficiary excluding delivery costs and VAT.
The provision is based on standard female mortality rates and assumes beneficiaries will continue to
switch their entitlement from solid fuel to cash in line with rates observed in the recent past. Costs
are expected to be incurred up to 2062. The discounted liability at 31 March 2019 is £363 million (31
March 2018: £463 million); the undiscounted liability at 31 March 2019, at prices as at the reporting
date so excluding the impact of future inflation, is £352 million (31 March 2018: £397 million).
British Shipbuilders
The provision covers the cost of personal injury compensation claims by former employees of British
Shipbuilders and its subsidiaries arising primarily from exposure to asbestos during the course of their
work. The core Department has taken on full responsibility for the liabilities of the former Corporation
which was abolished in March 2013. It is subject to considerable uncertainty. The discounted liability
at 31 March 2019 is £134 million (31 March 2018: £201 million); the undiscounted liability of
£159 million (31 March 2018: £168 million) is based on an actuarial review as at 31 March 2016 and
includes allowance for future inflation judged appropriate by the actuary. The review had identified the
range for the potential inflated, undiscounted liability at 31 March 2016 as between £118 million and
£389 million with liabilities extending up to 2048.
British Coal Corporation Health Liabilities (Legacy ailments)
The provision covers the cost of compensation claims relating to personal injuries suffered by former
British Coal mineworkers, responsibility for which falls to the core Department by a restructuring
scheme under the Coal Industry Act 1994. The discounted liability at 31 March 2019 is £101 million
(31 March 2018: £124 million); the undiscounted liability of £98 million, at prices as at the reporting
date so excluding the impact of future inflation (31 March 2018: £109 million), is based on forecasts
of settlement of claims, taking account of discussion with the core Department’s legal advisors and
claim handlers and recent actuarial estimates. It is subject to considerable uncertainty and includes
undiscounted estimates at prices as at the reporting date of £11 million (31 March 2018: £22 million)
for induced hearing loss, £68 million (31 March 2018: £68 million) for miscellaneous disease claims
including phurnacite, mesothelioma, pneumoconiosis, pleural thickening, asbestos related conditions,
vibration white finger, chronic obstructive pulmonary disease, cancer, pleural plaques and other minor
benefits schemes and £19 million (31 March 2018: £19 million) for litigation by former British Coal Coke
Oven Workers. The current estimate is that liabilities will extend up to 2050.
Onerous leases
The core Department has onerous leases in respect of office accommodation at 151 Buckingham
Palace Road, 10-18 Victoria Street and other locations. The leases are held by the Government
Property Agency but the obligation to finance their running costs remains with the core Department.
The department has attempted to mitigate potential losses by subleasing but, given current market
conditions and future forecasts, has determined that, at the reporting date, neither the current nor
future potential subleases will recover the full costs incurred. The discounted liability at 31 March 2019
is £113 million (31 March 2018: £126 million); the undiscounted liability at 31 March 2019, including the
impact of future inflation is £115 million (31 March 2018: £119 million). The liabilities extend to 2026.

Annual report and accounts 2018-19
192
NDPBs and other designated bodies
Coal Authority
The Coal Authority provision relates predominantly to the Authority’s responsibilities for mine water
treatment, public safety and subsidence pumping stations. Significant uncertainties are associated
with estimation of likely costs in respect of these liabilities. The discounted liability at 31 March 2019 is
£2,299 million (31 March 2018: £4,328 million). The undiscounted liability at 31 March 2019 is £2,174
million (31 March 2018: £1,902 million). Further details are reported in the Coal Authority Annual
Report and Accounts.
Included in other provisions in note 19.2 for the core Department is the Coal Health provision (legacy
ailments), which is subject to significant uncertainty.
Early departure costs and restructuring
£67 million (31 March 2018: £72 million) of the restructuring provision relates to site licence companies
and includes continuing annual payments under early retirement arrangements to individuals who
retired early, or had accepted early retirement, before 31 March 2019 and will continue at least
until the date at which the individual would have reached normal retirement age. The undiscounted
equivalent is 31 March 2019 is £68 million (31 March 2018: £76 million).
Enterprise Capital Fund
Following the introduction of IFRS 9 ‘Financial Instruments’, the British Business Bank’s Enterprise
Capital Fund commitments to provide loans under the market rate were designated to be measured
at Fair Value through Profit or Loss. As a result, the Departmental Group has transferred out the
loan commitment liabilities of £184 million as at 31 March 2018 from “Other provisions” to disclose
separately together with financial guarantee liabilities. Further details can be found in note 20 ‘Financial
Guarantee and Loan Commitment Liabilities’.
20 Financial Guarantee and Loan Commitment Liabilities
31 March 2019
31 March 2018
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Balance at 1 April
61
61
61
61
IFRS 9 Adjustments to Opening Balances
(16)
168
-
-
Revised balance at 1 April
45
229
61
61
Additions
20
58
17
17
Net remeasurement
-
(46)
(5)
(5)
Called
(11)
(11)
(11)
(11)
Amortisation
-
-
(1)
(1)
Balance at 31 March
54
230
61
61
Comprising:
Financial guarantee liabilities
54
54
61
61
Loan commitment liabilities
-
176
-
-
Balance at 31 March
54
230
61
61
Of which:
Current liability
11
11
16
16
Non-current liability
43
219
45
45
Balance at 31 March
54
230
61
61

Financial Statements
193
Following the introduction of IFRS 9 ‘Financial Instruments’, the British Business Bank’s Enterprise
Capital Fund commitments to provide loans under the market rate were designated to be measured
at Fair Value through Profit or Loss. As a result, the Departmental Group has transferred out the
loan commitment liabilities of £184 million as at 31 March 2018 from “Other provisions” to disclose
separately together with financial guarantee liabilities.
21 Retirement benefit obligations
The Departmental Group consolidates 9 defined benefit pension arrangements from its designated
bodies including:
• UK Research and Innovation
• Nuclear Decommissioning Authority
• Nuclear site licence companies
All schemes are accounted for in accordance with IAS 19 ‘Employee Benefits’. They are subject
to the UK regulatory framework and under the scope of the scheme specific funding requirement.
The schemes’ trustees are responsible for operating these defined benefit plans and have a
statutory responsibility for ensuring the schemes are sufficiently funded to meet current and future
benefit payments.
Defined benefit scheme liabilities expose the Departmental group to material financial uncertainty,
arising from factors such as changes in life expectancy and in the amount of pensions payable. Some
scheme investments, such as equities, should offer long-term growth in excess of inflation, but can be
more volatile in the shorter term than government bonds.
The details of each scheme are discussed below.
UK Research and Innovation (UKRI)
The UKRI operates the legacy Medical Research Council (MRC) defined benefit, final salary pension
scheme. A full actuarial evaluation was undertaken as at 31 December 2016 which was rolled forward
by the actuary to determine the approximate position as at 31 March 2019.
Further details regarding the nature of the benefits provided, regulatory framework, actuarial
assumptions, sensitivity analysis, key risks and risk management policy including asset-liability
matching strategies, and any funding arrangements or funding policy that may affect future
contributions can be found in the accounts of UKRI.
Nuclear Decommissioning Authority (NDA)
Two defined benefit pension schemes relate to the NDA – the Closed and Nirex sections of the
Combined Nuclear Pension Plan (CNPP). Both are closed to new entrants. Full actuarial evaluations
were undertaken as at 31 March 2016. The actuaries rolled forward the results to determine
approximate positions as at 31 March 2019. Further details regarding the nature of the benefits
provided, regulatory framework, actuarial assumptions, sensitivity analysis, key risks and risk
management policy including asset-liability matching strategies, and any funding arrangements or
funding policy that may affect future contributions can be found in the accounts of NDA.
Nuclear site licence companies (SLCs)
There are 6 defined benefit final salary pension schemes relating to the 4 SLCs comprising: a) the LLWR
section of the CNPP (for LLW Repository Limited), b) the SLC section of the Magnox Electric Group of the
ESPS and the Magnox Section of the CNPP (for Magnox Limited), c) the Group Pension Scheme SLC
section of the CNPP and the Sellafield section of the CNPP (for Sellafield Limited) and d) the Dounreay
Section of the CNPP (for Dounreay Site Restoration Limited). All are closed to new entrants. The most
recent triennial actuarial valuations were undertaken as at 31 March 2016 for all six SLCs schemes. The
actuaries rolled forward the results to determine approximate positions as at 31 March 2019.

Annual report and accounts 2018-19
194
Further details regarding the nature of the benefits provided, regulatory framework, key risks and risk
management policy including asset-liability matching strategies, and any funding arrangements or
funding policy that may affect future contributions can be found in the CNPP Statement of Investment
Principles at https://www.cnpp.org.uk/document-library/, and in the Electricity Supply Pension
Scheme’s Annual Reports at https://megtpensions.com/ finance-report.
31 March 2019
31 March 2018
Funded pension
schemes
Funded pension
schemes
£m
£m
Present value of defined benefit obligation at 1 April
7,632
7,568
Interest cost
197
190
Current service cost
248
267
Past service cost
15
6
Benefits paid
(231)
(215)
Actuarial (gains)/losses in financial assumption
422
(127)
Actuarial (gains)/losses on defined benefit obligation due to
demographic assumptions
(68)
(103)
Actuarial (gains)/losses arising from experience adjustments
13
20
Employee contributions
25
26
Transfer in
(13)
-
Present value of defined benefit obligation at 31 March
8,240
7,632
Fair value of assets at 1 April
6,946
6,691
Expected return on plan assets
179
170
Employer contributions
149
143
Benefits paid
(231)
(215)
Actuarial gains/(losses)
264
131
Employee contributions
25
26
Transfer in
(13)
-
Fair value of assets at 31 March
7,319
6,946
Net liability at 31 March
921
686
The increase in the net liability at 31 March 2019 compared to 31 March 2018 is primarily due to a
decrease in the discount rate applied to the defined benefit obligation for Magnox Limited from 2.6%
at 31 March 2018 to 2.4% at 31 March 2019 and for Sellafield Limited from 2.6% at 31 March 2018 to
2.5% at 31 March 2019.

Financial Statements
195
Net (asset)/liability by scheme
31 March 2019
31 March 2018
Present
value of
defined
benefit
obligation
Fair value
of assets
Net
liability/
(asset)
Present
value of
defined
benefit
obligation
Fair value
of assets
Net
liability/
(asset)
£m
£m
£m
£m
£m
£m
UK Research and Innovation -
Medical Research Council
1,605
1,649
(44)
1,460
1,582
(122)
LLW Repository Ltd - LLWR section
of CNPP
33
22
11
27
20
7
Magnox Ltd - SLC section of Magnox
Electric Group of ESPS
3,298
3,214
84
3,185
3,140
45
Magnox Ltd - Magnox section of
CNPP
161
120
41
141
109
32
Sellafield Ltd - Group Pension
Scheme SLC section of CNPP
707
682
25
682
649
33
Sellafield Ltd - Sellafield section of
CNPP
2,119
1,386
733
1,852
1,217
635
Dounreay Site Restoration Ltd -
Dounreay section of CNPP
159
106
53
130
94
36
Nuclear Decommissioning Authority
158
140
18
155
135
20
Total net liability at 31 March
8,240
7,319
921
7,632
6,946
686
Asset allocation
31 March 2019
31 March 2018
£m
£m
Equities
2,211
2,471
Property
765
698
Government bonds
1,933
1,678
Corporate bonds
541
626
Other growth assets
1,734
1,362
Other
135
111
Balance at reporting date
7,319
6,946
The Magnox schemes had a total asset balance of £3,331 million, of which £119 million of property
assets and £1,185 million of other growth assets were not quoted in an active market. The Sellafield
schemes had £2,067 million of total assets, the majority of which excluding the amount held in the
Trustees’ bank account and some private equity investments due to their illiquid nature had a quoted
market value in an active market. The UKRI - MRC scheme’s total assets of £1,649 million included
£451 million of quoted equities and £129 million of quoted bonds.

Annual report and accounts 2018-19
196
Expected contribution over the next accounting period
It is possible that the actual amount paid might be different to the estimated amount. This may be
due to contributions, benefits payments or pensionable payroll differing from expected, changes to
schemes’ benefits or settlement/curtailment events that are currently unknown.
31 March 2019
31 March 2018
£m
£m
UK Research and Innovation - Medical Research Council
25
27
LLW Repository Ltd – LLWR section of CNPP
1
1
Magnox Ltd – SLC section of Magnox Electric Group of ESPS
27
39
Magnox Ltd – Magnox section of CNPP
5
10
Sellafield Ltd – Group Pension Scheme SLC section of CNPP
7
6
Sellafield Ltd – Sellafield section of CNPP
78
74
Dounreay Site Restoration Ltd – DSRL section of CNPP
6
7
Nuclear Decommissioning Authority
1
1
Total
150
165
Weighted average duration of the defined benefit obligation plans
31 March 2019
31 March 2018
£m
£m
UK Research and Innovation – Medical Research Council
21
21
LLW Repository Ltd – LLWR section of CNPP
20
20
Magnox Ltd – SLC section of Magnox Electric Group of ESPS
16
16
Magnox Ltd – Magnox section of CNPP
22
22
Sellafield Ltd – Group Pension Scheme SLC section of CNPP
20
20
Sellafield Ltd – Sellafield section of CNPP
20
20
Dounreay Site Restoration Ltd – DSRL section of CNPP
20
30
Nuclear Decommissioning Authority
23
23
Major actuarial assumptions for SLC schemes
Dounreay Site
Restoration Limited
LLW Repository
Limited
Magnox Limited
Sellafield Limited
2018-19
2017-18
2018-19
2017-18
2018-19
2017-18
2018-19
2017-18
Discount rate
2.5%
2.6%
2.4%
2.6%
2.4%
2.6%
2.5%
2.6%
Inflation (Retail Prices
Index)
3.5%
3.1%
3.2%
3.1%
3.5%
3.4%
3.5%
3.5%
Life expectancy in
years at 65, currently
aged 65 (male)
21.8
21.8
21.9
21.8
21.9
Life expectancy in
years at 65, currently
aged 45 (male)
22.9
22.9
23.1
22.9
23.1
Life expectancy in
years at 65, currently
aged 65 (female)
23.7
23.7
23.8
23.7
23.8
Life expectancy in
years at 65, currently
aged 45 (female)
25.0
25.0
25.0
25.0
25.0
Life expectancy in
years at 60, currently
aged 60 (male)
26.6
28.0
28.3

Financial Statements
197
Dounreay Site
Restoration Limited
LLW Repository
Limited
Magnox Limited
Sellafield Limited
2018-19
2017-18
2018-19
2017-18
2018-19
2017-18
2018-19
2017-18
Life expectancy in
years at 60, currently
aged 40 (male)
28.1
29.0
29.4
Life expectancy in
years at 60, currently
aged 60 (female)
28.6
30.0
30.3
Life expectancy in
years at 60, currently
aged 40 (female)
30.2
31.1
31.4
Major actuarial assumptions for NDA and UKRI
Nuclear
Decommissioning
Authority
UK Research and
Innovation
2018-19
2017-18
2018-19
2017-18
Discount rate
2.5%
2.6%
2.4%
2.6%
Inflation (Retail Prices Index)
3.5%
3.5%
3.6%
3.4%
Life expectancy in years at 65, currently aged 65 (male)
21.8
21.9
23.0
23.0
Life expectancy in years at 65, currently aged 45 (male)
22.9
23.1
24.9
24.9
Life expectancy in years at 65, currently aged 65 (female)
23.7
23.8
24.6
24.6
Life expectancy in years at 65, currently aged 45 (female)
25.0
25.0
26.5
26.5
Sensitivity analysis
Dounreay Site
Restoration
Limited
LLW
Repository
Limited
Magnox
Limited
Sellafield
Limited
Nuclear
Decommissioning
Authority
UK Research
and
Innovation
£m
£m
£m
£m
£m
£m
0.1 percentage point
decrease in annual
discount rate
-
-
63
-
-
-
0.1 percentage point
increase in inflation
assumption
-
-
61
-
-
-
0.5 percentage point
decrease in annual
discount rate
17
4
-
347
16
176
0.5 percentage point
increase in inflation
assumption
17
4
-
347
16
128
1 year increase in life
expectancy
6
1
148
102
6
48
The table shows the increase in liability that would result from changes in these actuarial assumptions.

Annual report and accounts 2018-19
198
22 Capital and other commitments
Total minimum payments in respect of capital, lease and other commitments
31 March 2019
31 March 2018 restated
Note
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Contracted capital commitments
22.1
22
1,929
5
1,912
Minimum future payments under:
Operating leases
22.2
326
462
213
333
Finance leases
-
28
-
30
PFI contracts and service concession
arrangements
-
-
2
2
Other financial commitments
22.3
3,012
3,427
2,928
3,370
Total
3,360
5,846
3,148
5,647
22.1 Capital commitments
31 March 2019
31 March 2018
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Contracted capital commitments not otherwise
included in these financial statements:
Property, plant and equipment
17
271
3
315
Intangible assets
5
20
2
28
Loans, Investments
-
1,638
-
1,569
Total
22
1,929
5
1,912
Core Department
The core Department has not entered into any significant capital commitments.
NDPBs and other designated bodies
Capital commitments as at 31 March 2019 include the following significant items:
• Property, plant and equipment commitments for United Kingdom Research and Innovation (UKRI)
of £231 million (31 March 2018: £181 million) at the UKRI Institute sites due in one to three years.
• Investment commitments of £1,203 million (31 March 2018: £1,139 million) for the British Business
Bank plc (BBB) relating to undrawn investment commitments, £176 million (31 March 2018:
£234 million) for Northern Powerhouse Investment Limited relating to capital calls to be utilised over
the next eight years, £176 million (31 March 2018: £118 million) for Midlands Engine Investments
Limited relating to capital calls to be utilised over the next nine years and £83 million (31 March
2018: £79 million) for the BIS (Postal Services Act 2011) Company Limited, which has capital calls
relating to investments in respect of its private equity and property funds financial instruments.

Financial Statements
199
22.2 Commitments under leases
22.2.1 Operating leases: Department as a lessee
Total future minimum lease payments under operating leases are given in the table below for each of
the following periods:
31 March 2019
31 March 2018
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Obligations under operating leases
comprise:
Land:
Not later than one year
-
1
-
1
Later than one year and not later than five
years
-
2
-
2
Later than five years
-
20
-
20
-
23
-
23
Buildings:
Not later than one year
57
73
59
75
Later than one year and not later than five
years
139
176
124
157
Later than five years
122
172
22
67
318
421
205
299
Other:
Not later than one year
5
9
5
7
Later than one year and not later than five
years
3
9
3
4
8
18
8
11
Total
326
462
213
333
The commitment for Buildings for the core Department has increased to £295 million at 31 March
2019 (31 March 2018: £188 million) due to extension of the lease on the property at 1 Victoria Street,
London; this commitment is £187 million at 31 March 2019 (31 March 2018: £45 million). Further
information about finance leases and sub-lease arrangements of the Agencies, NDPBs and other
designated bodies can be found in the accounts of the relevant bodies.
22.2.2 Operating leases: Department as a lessor
Total future minimum lease receivables under operating leases are given in the table below:
31 March 2019
31 March 2018
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Receivables under operating leases for
the following periods comprise:
Not later than one year
-
10
-
9
Later than one year and not later than five
years
1
25
1
22
Later than five years
3
40
3
42
Total
4
75
4
73

Annual report and accounts 2018-19
200
22.3 Other financial commitments
The Departmental Group has entered into non-cancellable contracts (which are not leases, PFI
contracts or other service concession arrangements) for subscriptions to international bodies
and various other expenditures. Future payments to which the Departmental Group is committed
are as follows:
31 March 2019
31 March 2018 restated
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Not later than one year
484
698
553
764
Later than one year and not later than five
years
982
1,182
1,224
1,440
Later than five years
1,546
1,547
1,151
1,166
Total
3,012
3,427
2,928
3,370
22.3.1 International subscriptions
The financial commitments payable include subscriptions payable to international bodies, analysed by
the period in which the payments are due:
Within one
Year
Later than
1 year and
not later
than 5
years
Later than
5 Years
Total
31 March
2019
Total
31 March
2018
Organisation
Note
£m
£m
£m
£m
£m
International Atomic Energy Agency
a
17
68
85
170
139
European Space Agency
b
267
415
-
682
926
Other subscriptions
8
30
35
73
62
Core Department and Agencies
total
292
513
120
925
1,127
European Organisation for Nuclear
Research (CERN)
c
149
83
-
232
235
Institut Laue Langevin (ILL)
d
19
78
-
97
113
Other subscriptions
44
39
1
84
91
Departmental Group total
504
713
121
1,338
1,566
Notes:
The Departmental Group is required to subscribe to a number of bodies on an on-going and continuous basis. These
subscriptions are paid in Euros, Swiss Francs and pounds sterling. The subscriptions described below are paid in Euros or
Swiss Francs and amounts paid are subject to fluctuations due to exchange rate differences.
a) The core Department is responsible for paying in the UK’s annual subscriptions to the International Atomic Energy
Agency (IAEA). The IAEA is the UN-affiliated organisation responsible for ensuring the safe, secure and peaceful use
of civil nuclear technologies, through monitoring nuclear safeguards, setting international standards and guidance for
nuclear safety and security promoting nuclear applications for development.
b) The UK Space Agency pays international subscriptions to the European Space Agency (ESA) three times a year and
these amounts are agreed several years in advance. The payments reported reflect existing commitments on forward
exchange contracts placed with the Bank of England to cover periods until 1 October 2021. The annual subscriptions
are to be set at a minimum of €300 million and will be aligned with the agreed ESA programmes activity. It is expected
that these amounts will be paid by means of forward exchange contracts or amounts translated on the date of payment.
c) United Kingdom Research and Innovation (UKRI) shares the funding of the capital and running costs of CERN with other
major scientific nations. There is a notice of withdrawal period of 12 months after the end of the current calendar year.
The commitment is due to end in 2020.

Financial Statements
201
d) The UK, through UKRI, has signed up to International Conventions, with respect to Institut Laue-Langevin (ILL). The 5th
protocol of the Intergovernmental Convention was signed in July 2013 and will remain in force until 31 December 2023.
Thereafter it shall be tacitly extended from year to year unless any of the Governments gives written notification to the
other Governments of its intention to withdraw from the Convention. Any such withdrawal will take effect upon the expiry
of two years from the date of receipt of the notification by any of the other Governments or on such later date as may be
specified in the notification.
22.3.2 Other commitments
The financial commitments payable in future years include payments due under non-cancellable
contracts to the following organisations:
Within one
year
Later than
one year
and not
later than
five years
Later than
five years
Total
31 March
2019
Total
31 March
2018
restated
Organisation
Note
£m
£m
£m
£m
£m
Met Office
a
91
407
1,395
1,893
1,546
Other commitments
101
62
31
194
161
Core Department and Agencies
total
192
469
1,426
2,087
1,707
Other commitments
2
-
-
2
3
Departmental Group total
194
469
1,426
2,089
1,710
Commitments for the core Department as at 31 March 2018 have been restated to remove contracts
with Ordnance Survey which transferred to the Cabinet Office in 2018-19. The nature of the most
significant contract is described below:
a) The core Department has agreements with the Met Office (a trading fund owned by the
department) to provide meteorological services including the Public Weather Service agreement
which the department manages on behalf of the government and for which the forward
commitment is separately itemised above; this agreement is of indefinite duration but reviewed on
an annual basis.

Annual report and accounts 2018-19
202
23 Financial instruments
The carrying amounts of financial instruments in each of the IFRS 9 categories are as follows:
31 March 2019
31 March 2018
Note
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Financial assets
Financial assets at amortised cost:
Cash and cash equivalents
17
1,283
2,088
1,246
2,034
Receivables(i)
14
1,146
2,023
1,374
2,001
Loans to public sector bodies(ii) & (iii)
10.3, 16
1,285
893
1,238
943
Other financial assets and private
sector loans
2
840
2
606
Held to maturity assets
11.2
-
-
-
7
Total financial assets at
amortised cost
3,716
5,844
3,860
5,591
Available for sale financial assets:
Repayable launch investments
11.1
-
-
1,047
1,047
Ordinary shares in public sector
companies(iv)
10.1
-
-
880
1,337
Other financial assets
11.2
-
-
121
2,676
Total available for sale
financial assets
-
-
2,048
5,060
Financial assets elected at fair value
through other comprehensive income
(FVOCI):
Ordinary shares in public sector
companies(iv)
10.1
915
1,404
-
-
Other financial assets
11.2
46
60
-
-
Total financial assets elected at
FVOCI
961
1,464
-
-
Financial assets mandatory at fair
value through profit or loss (FVTPL):
Repayable launch investments
11.1
1,058
1,058
-
-
Derivatives - Forward contracts
24
24
78
86
Other financial assets
11.2
90
2,140
-
1
Total financial assets mandatory
at FVTPL
1,172
3,222
78
87
Public dividend capital:
Public dividend capital
10.2
81
81
81
81
Total public dividend capital
81
81
81
81
Financial liabilities
Financial liabilities as amortised cost:
Payables(i)
18
(1,924)
(2,623)
(1,335)
(2,175)
Total financial liabilities as
amortised cost
(1,924)
(2,623)
(1,335)
(2,175)
Financial liabilities mandatory at fair
value through profit or loss (FVTPL):
Derivatives - Forward contracts
(3)
(15)
-
-
Derivatives - Contracts for difference
(CfD)
9
-
(12,921)
-
(15,892)

Financial Statements
203
31 March 2019
31 March 2018
Note
Core
Department
and Agencies
Departmental
Group
Core
Department
and Agencies
Departmental
Group
£m
£m
£m
£m
Total financial liabilities mandatory
at FVTPL
(3)
(12,936)
-
(15,892)
Financial liabilities designated at fair
value through profit or loss (FVTPL):
Loan commitment liabilities
20
-
(176)
-
-
Total financial liabilities designated
at FVTPL
-
(176)
-
-
Financial guarantee liabilities:
Financial guarantee liabilities
20
(54)
(54)
(61)
(61)
Total financial guarantee liabilities
(54)
(54)
(61)
(61)
i. The amounts disclosed above as payables and receivables exclude any assets or liabilities which
do not arise from a contractual arrangement.
ii. Loans to public sector bodies comprises the loans detailed in Note 16 and Other loans and
investments in Other public sector bodies detailed in 10.3.
iii. Loans to public sector bodies in the core Department for 2018-19 excludes £169 million (2017-18:
£63 million) related to the loan investments in the UK Climate Investments LLP, Cornwall and Isles of
Scilly Investments Limited, Northern Powerhouse Investment Fund and Midlands Engine Investment
Fund, as these are accounted for at cost under IAS 27.
iv. Ordinary shares in public sector companies excludes bodies that are consolidated in the
Departmental Group, as these are held at cost, see Note 10.1.
Financial risk management
IFRS 7 ‘Financial Instruments: Disclosure’ requires the disclosure of information which will allow
users of financial statements to evaluate the significance of financial instruments on the Departmental
Group’s financial performance and position and the nature and extent of its exposure to risks arising
from these instruments.
As the cash requirements of the Departmental Group are largely met through the Estimates process,
financial instruments play a more limited role in creating risk than would apply to a private sector body
of a similar size.
The Departmental Group is however exposed to credit, market, interest rate, liquidity and
commodity price risks due to the specific programmes and activities undertaken in pursuance of the
Departmental Group’s objectives.
Credit risk
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other
party by failing to discharge an obligation.
Significant credit risks can be summarised as follows:
Core Department
• Investment Funds – Investee companies may not perform as expected and the core Department
may not recover its initial investment. The core Department minimises the risk by monitoring the
overall performance of the Funds and to secure value for the department as an investor. This
includes a full evaluation of each business case submitted prior to committing funds.
• Financial guarantees – the core Department is exposed to credit risk from potential default
by recipients of loans guaranteed by the core Department. The risk is minimised for the most
significant guarantee scheme, the Enterprise Financial Guarantee (EFG) scheme, by devolving

Annual report and accounts 2018-19
204
responsibility to the lending institutions to determine that prospective borrowers are commercially
viable. Lenders are required to apply normal commercial practice. The department undertakes
an independent audit of lenders participating in the EFG scheme by sampling and checking
guarantees granted and defaults arising using recognised statistical sampling and auditing
techniques and by auditing individual default claims by exception. Losses are shared between
the department and lending institution. The EFG is subject to a cap which limits the Department’s
exposure. As at 31 March 2019 the core Department has £588 million of guarantees outstanding
(31 March 2018: £630 million) which will expire over the next 10 years as the underlying debt
matures. Due to the cap on payouts, the maximum amount that could be paid out if all loans
defaulted is £260 million (31 March 2018: £239 million). However, not all loans are expected
to default and the liability is estimated at £54 million (31 March 2018: £61 million). Future fees
receivable for the guarantees are estimated at £24 million after allowing for bad debts (31 March
2018: £27 million). Both the liability for expected pay outs and asset for future fees are recognised
on the Statement of Financial Position.
NDPBs and other designated bodies
The British Business Bank (BBB) investments are assessed by BBB’s Valuation Committee. BBB
produces credit risk ratings for its investments based upon a risk grading of the financial obligor and
the estimated Loss Given Default on that investment. Risk drivers which are assessed in setting the
ratings include the financial viability and lending safety of the investment and, if available, the rating
assigned by an external credit agency. This is mitigated by new product approval processes that
assess default and loss rates, due diligence of delivery partners underwriting methods, and portfolio
monitoring and default models being put in place.
Credit risk rating and loss allowance
The Departmental Group has the following financial assets subject to the expected credit loss model:
• Trade receivables, contract assets, and lease receivables
• Loans, bonds, and term deposits
• Cash and cash equivalents
Trade receivable, contract assets and lease receivables
The core Department applies the IFRS 9 simplified approach using an allowance matrix to measure
the lifetime expected loss allowance for trade receivables in accordance with the FReM guidance.
Trade receivables are grouped based upon credit risk characteristics and the number of past-due
days. Default is defined as 90 days past due. The loss rates are estimated using the historic data for
each aging group. Forward-looking information such as macroeconomic factors and entity specific
situations are considered for entities with significant outstanding balances. Balances with other core
central government departments are excluded from recognising stage-1 and stage-2 impairments
following the FReM adaptions.
On this basis, the loss allowance as at 31 March 2019 determined as follows for trade receivables in
the core Department:
31 March 2019
Core Department
Current
1-30 days
31-60 days
61-90 days
91+ days
Total
Expected Loss rate
11%
7%
2%
52%
100%
Gross carrying amount- trade
receivables (excluding other
government debt) (£m)
5
1
1
0
5
12
Loss allowance (£m)
1
0
0
0
5
6
The loss allowance for trade receivable balances held by ALBs has been assessed at an organisation
level and the total loss allowance estimated is immaterial for detailed disclosure on loss rates.
The movement in the allowance for provisions in respect of trade receivables during the year was
disclosed below with the comparative amounts for 2017-18 reflecting the allowance for impairment
losses under IAS 39.

Financial Statements
205
31 March 2019
Core Department and Agencies
Departmental Group
£m
£m
Balance at 1 April
-
-
IFRS 9 Adjustment to opening balances
14
15
Revised balance at 1 April
14
15
Net remeasurement
1
7
Write-off
-
-
Balance at 31 March
15
22
The Group has assessed the contract assets and lease receivables, and the ECL was estimated to be nil.
Loans, bonds and term deposits
Where possible, the Departmental Group monitors changes in credit risk by tracking published
external credit ratings. For all assets other than those held by British Business Bank, an internal credit
rating system, which was developed based on other established methodologies, was used to assign
credit risks for loans that do not have external credit rating. The 12-month and lifetime probabilities of
default are based upon Moody’s published research on the global default rate adjusted for historical
repayment data and any macro-economic pressures which could impact the entity’s ability to
repay the loan.
The British Business Bank (BBB) investments are assessed by BBB’s Valuation Committee. BBB produces
credit risk ratings for its investments based upon a risk grading of the financial obligor and the estimated
Loss Given Default on that investment. Further details can be found in BBB’s annual report and accounts.
The following table presents an analysis of credit quality of loans, bonds and term deposits. It
indicates whether assets were subject to a 12-month ECL or lifetime ECL allowance, and whether they
were credit-impaired.
31 March 2019
31 March 2018
Amortised cost
12 month
ECL
Lifetime
ECL- not
impaired
Lifetime
ECL-
impaired
Total
Loans and
receivables
Available
for sale
Held to
maturity
Total
Credit rating
£m
£m
£m
£m
£m
£m
£m
£m
Low risk financial
assets
1,267
-
-
1,267
1,143
40
7
1,190
Medium risk
financial assets
310
25
2
337
145
78
-
223
High risk financial
assets
115
19
-
134
286
-
-
286
Default financial
assets
-
-
78
78
17
-
-
17
Total gross
carrying
amounts
1,692
44
80
1,816
1,591
118
7
1,716
Loss allowance
(11)
(15)
(57)
(83)
(42)
-
-
(42)
Carrying amount
1,681
29
23
1,733
1,549
118
7
1,674

Annual report and accounts 2018-19
206
The Departmental Group does not hold any loans, bonds and term deposits measured at FVOCI.
The movement in the allowance for impaired loans, bonds and term deposits at amortised cost during
the year was as follows.
31 March 2019
12m ECL
Lifetime ECL
not impaired
Lifetime ECL
credit impaired
Total
£m
£m
£m
£m
Balance at 1 April
-
-
-
-
IFRS 9 Adjustment to opening balances
11
11
45
67
Revised balance at 1 April
11
11
45
67
Additions
5
8
3
16
Net remeasurement
(3)
(2)
(1)
(6)
Repayment
(1)
(2)
(2)
(5)
Transfer to credit loss not impaired
-
-
12
12
Transfer to credit loss impaired
(1)
-
-
(1)
Balance at 31 March
11
15
57
83
Cash and cash equivalents
The Group held cash and cash equivalents of £2,088 million as at 31 March 2019 (31 March 2018:
£2,034 million). The cash and cash equivalents are held with banks and financial institutions which are
rated AA- to AA+ based on S&P ratings.
Impairment on cash and cash equivalents has been measured on the 12-month expected loss basis
and reflects the short maturities of the exposures. The Departmental Group considers that cash and
cash equivalents have a low credit risk based on the external credit ratings of the holding parties.
Financial guarantee contracts and loan commitments
BBB’s ECF loan commitments were designated to be measured at FVTPL and the credit risk is,
therefore, reflected in their fair value.
Financial guarantee contracts are contracts that require the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due,
in accordance with the terms of a debt instrument.
Collateral
The Departmental Group holds collateral over loans held at amortised cost. The collateral held is in
the form of cash and buildings. The value of the assets held which are secured by collateral is
£575 million (31 March 2018: £654m). The value of the collateral held is higher than the value of the
assets secured by the collateral. The collateral was considered in estimating ECL.
Market risk
Market risk is the risk that fair values and future cash flows will fluctuate due to changes in market
prices. Market risk generally comprises of:
a) Foreign Currency risk.
Core Department
The core Department is exposed to a small amount of currency risk with respect to Repayable
Launch Investment contracts where income due from aircraft or engine sales may initially be based
in US Dollars, but it is minimal in the context of the overall Repayable Launch Investment portfolio.
Otherwise the core Department’s exposure to foreign currency risk during the year was insignificant.
Foreign currency income was negligible, and foreign currency expenditure was a small percentage of
total expenditure (less than 1%).

Financial Statements
207
All material assets and liabilities are denominated in pounds sterling.
Agencies
• Forward contracts - The UKSA pays an annual subscription in Euros to the European Space
Agency (ESA) and has entered into forward contracts to mitigate the risk. These derivative contracts
have been designated as cash flow hedges.
NDPBs and other designated bodies
• Forward contracts - UKRI are subject to foreign currency risks and have entered into forward
contracts to help mitigate these risks. These derivative contracts have been designated as cash
flow hedges by UKRI and at the reporting date the hedges met the IFRS 9 effectiveness criteria.
• Cash and cash equivalents held in foreign currency - BIS (Postal Services Act 2011) Company
Limited, UKRI and Nesta Trust are subject to minor foreign currency risk through the maintenance
of bank accounts in foreign currencies (predominantly USD and EUR) to deal with day-to-day
overseas transactions.
b) Interest Rate risk
Core Department
The core Department does not invest or access funds from commercial sources, but it is exposed to
interest rate risk with respect to the SFLGS and the EFG. For SFLGS and EFG, the core Department
is exposed to interest rate risk, as the majority of the loan guarantees are provided against variable
rate loans. The banks’ usual lending practices mean that fixed rate loans are usually available only for
small value short term loans. To minimise the risk of default due to interest rate rises, accompanied by
a decline in the economic environment, the core Department relies on the lenders assessment using
best commercial practice to manage the risk of default.
NDPBs and other designated bodies
For BIS (Postal Services Act 2011) Company Limited interest rate risk arises from the effects of
fluctuations in the prevailing levels of market interest rates on the fair value of financial assets and
future cash flows. The Company holds fixed interest securities that are exposed to fair value interest
rate risk. The principal strategy is to manage the fair value risk by holding the debt securities until
maturity unless opportunities exist in the market for it to profit, for example, from any favourable
interest rate movements. Interest rate risk is not expected to have a significant impact.
BBB holds both fixed and variable rate investments. Interest rate risk is regularly monitored by each
organisation to ensure that the mix of fixed and variable borrowing is appropriate. BBB does not use
derivatives to hedge interest rate risk.
The impact of interest rates affects the discount rate used to arrive at the fair value of the CfD liability
held by LCCC. Changes in interest rates which affect the discount rate would therefore affect the
Statement of Financial Position valuation. However, the Group is not financially exposed to this risk
because the liability is funded through a levy on suppliers.
c) Other Market risk
Core Department
The core Department is exposed to wider risks relating to the performance of the economy as a
whole. The main risks resulting from a downward movement in the economy include failures of
investee companies of investment funds, loan defaults under the core Department’s EFG Scheme and
negative impacts on the core Department’s repayable launch investment income and valuations from
the potential resultant decrease in demand in the aerospace industry.
NDPBs and other designated bodies
UK Green Infrastructure Platform (UKGIP) is exposed to market risk through the concentration
of investments in the clean energy sector. UKGIP is also exposed to equity price risk due to its
investments in businesses developing construction assets across its priority sectors. The company
intends to withdraw from the investments when these assets are operational in order to recycle their
capital. The risk is minimised by spreading investments across all of its priority sectors.

Annual report and accounts 2018-19
208
The Nesta Trust is exposed to equity price risk due to its investment of a portion of its endowment
assets in publicly listed equity investments. Nesta Trust minimises this risk by investing for the medium
to long term, diversifying its equity investments over a number of managers with complementary
styles, and invests in investment funds with large institutional investors. The performance of these
investment managers is monitored regularly.
Inflation risk
The CfD valuation is based on models which use assumptions about future prices. The amounts
payable under the CfD contracts will be affected by the indexation of strike prices to reflect actual
inflation and an inflation risk arises from the possibility of differences between the assumed inflation
in the model and in the actual contracts. Inflation rates may not continue at the relatively low levels
experienced in recent years; the Group is not financially exposed to this risk because the liability is
funded through a levy on suppliers.
Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with
financial liabilities.
The core Department and its Agencies
In common with other Government departments, the future financing of its liabilities is to be met
by future grants of Supply, voted annually by Parliament. There is no reason to believe that future
approvals will not be forthcoming, therefore, on this basis the liquidity risk to the core Department and
its Agencies is minimal.
NDPBs and other designated bodies
Information about the Departmental Group’s objectives, policies and processes for managing and
measuring risk can be found in the Governance Statement.
Commodity price risk
Commodity price risk is the risk or uncertainty arising from possible price movements. The amounts
payable under the CfD contracts are exposed to price risk through the fluctuations in future actual
wholesale electricity prices, specifically, on how they will differ from the current forecast of future
prices in the central scenario. However the LCCC and the department are not financially exposed to
this risk because the liability is funded through a levy on suppliers.
Financial instruments: fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different
levels have been defined as follows:
• Level 1 - uses quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 - uses inputs for the assets or liabilities other quoted prices, that are observable either
directly or indirectly;
• Level 3 - uses inputs for the assets or liabilities that are not based on observable market data, such
as internal models or other valuation method.

Financial Statements
209
The following table presents the Departmental Group’s financial assets and liabilities that are
measured at fair value at 31 March 2019 and 31 March 2018:
31 March 2019
31 March 2018
Note
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
£m
£m
£m
£m
£m
£m
£m
£m
Financial assets
Available for sale
Ordinary shares in public
sector bodies
10.1
-
-
-
-
-
1,337
-
1,337
Ordinary shares in listed
equities
11.2
-
-
-
-
269
-
-
269
Ordinary shares in unlisted
private equities
11.2
-
-
-
-
-
9
308
317
Repayable launch investments
11.1
-
-
-
-
-
-
1,047
1,047
Gilts and bonds
11.2
-
-
-
-
59
-
-
59
Property related holdings
11.2
-
-
-
-
-
-
42
42
Investment funds
11.2
-
-
-
-
-
-
1,321
1,321
Other investments
11.2
-
-
-
-
8
456
204
668
Total available for sale
financial assets
-
-
-
-
336
1,802
2,922
5,060
FVOCI elected
Ordinary shares in public
sector bodies
10.1
-
1,404
-
1,404
-
-
-
-
Private sector shares
11.2
8
47
21
76
-
-
-
-
Total financial assets at
FVOCI elected
8
1,451
21
1,480
-
-
-
-
FVTPL mandatory
Repayable launch investments
11.1
-
-
1,058
1,058
-
-
-
-
Investment funds
11.2
187
-
1,781
1,968
-
-
-
-
Bonds
11.2
1
-
-
1
-
-
-
-
Private sector shares
11.2
88
-
-
88
-
-
-
-
Other investments
11.2
-
-
68
68
-
-
-
-
Derivatives - Forward
contracts
-
24
-
24
-
109
-
109
Total financial assets at
FVTPL mandatory
276
24
2,907
3,207
-
109
-
109
Total financial assets
measured at fair value
284
1,475
2,928
4,687
336
1,911
2,922
5,169
Financial Liabilities
FVTPL mandatory
Loan commitment liabilities
20
-
-
(176)
(176)
-
-
-
-
Total liabilities at FVTPL
mandatory
-
-
(176)
(176)
-
-
-
-
FVTPL designated
Derivatives - Forward
contracts
-
(15)
-
(15)
-
(15)
-
(15)
Derivatives - CfD
9
-
-
(12,921)
(12,921)
-
-
(15,892)
(15,892)
Total financial liabilities at
FVTPL designated
-
(15)
(12,921)
(12,936)
-
(15)
(15,892)
(15,907)
Total financial liabilities
measured at fair value
-
(15)
(13,097)
(13,112)
-
(15)
(15,892)
(15,907)
Transfers between levels of the fair value hierarchy are deemed to occur at the end of the reporting
period. There were no transfers between level 1 and 2 during the year.

Annual report and accounts 2018-19
210
Specific valuation techniques used to value financial instruments include:
• The fair value of the CfDs has been calculated using the income approach based on level 3 inputs,
which reflects the present value of future cash flows that are expected to occur over the contract
term of the CfD.
• For details regarding the fair value measurement of RLI’s, refer to note 11.1.
• The fair value of forward foreign exchange contracts is determined using forward exchange
rate at the reporting date based on Level 2 inputs, with the resulting value discounted back to
present value.
• Other techniques, such as discounted cash flow analysis or for non-quoted ordinary shares and
investment funds that are not actively traded, the net assets of the company/ underlying fund are
used. These are classified as level 3.
• The fair value of Public Sector shares are based upon net assets and classified as level 2.
The following table presents the changes in level 3 instrument for the year ended 31 March 2019,
excluding the CfDs which are disclosed in note 9.
Ordinary
shares in
unlisted
private
equities
Repayable
launch
investments
Property
related
holdings,
Investment
funds and
Other
financial
assets
Loan
Commitment
Liabilities
Total
£m
£m
£m
£m
£m
Balance at 1 April
308
1,047
1,567
-
2,922
IFRS 9 transfers into level 3
10
-
1
-
11
IFRS 9 transfer between different
investment categories
(298)
-
298
-
-
IFRS 9 transfers in/ (out) of fair value
-
-
(66)
(184)
(250)
Balance at 1 April
20
1,047
1,800
(184)
2,683
Additions
18
-
509
(38)
565
Repayments/disposals
-
(230)
(436)
46
(620)
Gains and losses recognised in
CSoCNE
(17)
241
(24)
-
200
Balance at 31 March
21
1,058
1,849
(176)
2,752
The following table presents the changes in level 3 instrument for the year ended 31 March 2018,
excluding CfDs which are disclosed in note 9.
Ordinary
shares in
unlisted private
equities
Repayable
launch
investments
Property
related
holdings,
Investment
funds and
Other financial
assets
Total
£m
£m
£m
£m
Balance at 1 April
429
1,205
1,327
2,961
Additions
7
-
650
657
Repayments/disposals
(94)
(103)
(409)
(606)
Gains and losses recognised in SoCNE
(34)
(55)
(1)
(90)
Balance at 31 March
308
1,047
1,567
2,922

Financial Statements
211
The most significant individual valuation using level 3 inputs in the Departmental Group excluding
CfDs is Repayable Launch Investments; sensitivity analysis is detailed in note 11.1.
The sensitivity analysis for the significant valuations using level 3 inputs for property related holdings
and investment funds are detailed in the financial statements of British Business Bank Plc and BIS
(Postal Services Act 2011) Company Limited.
Maturity profiles – discounted cashflows
The maturity profile of the discounted cashflows for the CfDs excluding Hickley Point C is shown below:
< 1 year
2-5 years
>5 years
Total
£m
£m
£m
£m
As at 31 March 2018
581
4,596
10,715
15,892
As at 31 March 2019
871
4,441
7,609
12,921
24 Contingent Liabilities
The core Department has the following contingent liabilities:
Basis of Recognition
Description
Unquantifiable
Core Department – Financial
Reporting Council funding
A guarantee has been given to the Financial Reporting Council that, if the
Council’s general voluntary funding from external sources falls sufficiently for
the department to have to consider making legislation to activate the statutory
levy under section 17 of the Companies (Audit, Investigations and Community
Enterprise) Act 2004, the department will make such a grant to cover the Council’s
costs as is sufficient to meet the preconditions in those levy raising powers
provided the requisite funding has not been made available through another grant.
Core Department - Coal
Industry Act 1994
Responsibility for compensation claims relating to personal injuries suffered
by former British Coal mineworkers between 1947 and 31 December 1994
transferred to the department on 1 January 1998 by a restructuring scheme under
the Coal Industry Act 1994. It is possible this liability could exceed the amount
for which provision has been made in note 19 depending on court judgements
relating to future claims.
Core Department - Deeds
relating to the Mineworkers’
Pension Scheme and British
Coal Staff Superannuation
Scheme under Paragraph
2(9) of Schedule 5 to the Coal
Industry Act 1994
Government guarantees were put in place on 31 October 1994, the day the
schemes were changed to reflect the impact of privatisation of the coal industry.
They are legally binding contracts between the scheme Trustees and the
Secretary of State for Business, Energy and Industrial Strategy. The guarantees
ensure that benefits earned by scheme members during their employment with
British Coal, and any benefit improvements from surpluses which were awarded
prior to 31 October 1994, will always be paid and will be increased each year
in line with the Retail Prices Index. If, at any periodic valuation, the assets of the
Guaranteed Fund of either scheme were to be insufficient to meet its liabilities, the
assets must be increased to bring the Fund back into balance. This is a long-term
contingent liability dependent on the performance of the schemes’ investments
and their mortality experience. Further details regarding the schemes can be
found in note 14.
Core Department - Indemnity
to Public Appointment
Assessors
The Cabinet Secretary has provided a government-wide indemnity to Public
Appointments Assessors (PAAs) against personal civil liabilities incurred in the
execution of their PAA functions.
Core Department - Nuclear
agreements and treaties
The department has a range of civil nuclear liabilities arising through its association
with the United Kingdom Atomic Energy Authority and British Nuclear Fuels
Limited as well as ensuring that the Government complies with its obligations
under the various international nuclear agreements and treaties.

Annual report and accounts 2018-19
212
Basis of Recognition
Description
Core Department - Site
restoration liabilities inherited
from British Coal
The department inherited responsibility from British Coal to reimburse certain
third parties for costs incurred meeting statutory environmental standards in the
restoration of particular coal-related sites.
Core Department – National
Dock Labour Board
Responsibility for compensation claims relating to personal injuries suffered by
former National Dock Labour Board employees transferred to the department
on 30 June 1990 under the Dock Work Act 1989 The timing and amounts of
any future liabilities will depend on the nature of future claims and whether the
courts decide that compensation is due and could exceed the amount for which
provision has been made in note 19.
Core Department – Supplier
indemnity
An indemnity has been provided to a supplier in respect of potential liabilities
arising from claims under the Transfer of Undertakings (Protection of Employment)
Regulations 2006 (TUPE).
Quantifiable
Core Department – Loan
guarantees (£45 million)
In order to encourage lending to smaller businesses, the department has
guaranteed a portion of net losses on designated loan portfolios of participating
banks (in excess of an agreed ‘first loss’ threshold) in return for a fee under the
ENABLE Guarantee programme administered by the British Business Bank. The
department has approved guarantee facilities totalling £1 billion, of which
£283 million is effective as at 31 March 2019 (31 March 2018: £nil) with a
potential loss to the department of £45 million (31 March 2018: £nil).
Core Department – Guarantees
to British Business Bank
(£206 million)
The department guarantees British Business Bank under the Enterprise Financial
Guarantee and Help to Grow financial guarantee schemes. The Enterprise
Financial Guarantee Scheme facilitates lending to viable businesses with the
maximum obligation for the department capped at £205 million at 31 March 2019
(31 March 2018: £241 million). The amount lent under the Help to Grow scheme
was £2.9 million at 31 March 2019 (31 March 2018: £1.8 million) with a maximum
potential liability for the department at 31 March 2019 of £1 million.
Core Department - Ofgem
administration costs from the
buy-out fund (£3.6-£3.8 million)
The department, the Scottish Government and the Northern Ireland Executive
have undertaken to support Ofgem’s costs for administering the Renewables
Obligation scheme (around £3.6 - £3.8 million) if there is insufficient money in
both the buy-out fund and late payment fund to cover these costs. The size of the
2018-19 buy-out fund will not be known until October 2019. It is dependent in part
on the availability and price of Renewable Obligation Certificates (ROCs) - if there
is a surplus of ROCs, suppliers may be more inclined to meet their obligations by
submitting ROCs but ultimately much depends on supplier behaviour which is
difficult to predict. The department will have an indication of how many ROCs are
available and whether there is likely to be a surplus after the end of the obligation
year (31 March 2019) but will not know the size of the buy-out fund until October
2019.
Core Department - Wave Hub
transfer (£5 million)
The department has indemnified Cornwall Council up to 2028 in respect of the
transfer of Wave Hub to a maximum of £5 million.

Financial Statements
213
The Departmental Group has the following contingent liabilities, which are either unquantifiable or
quantifiable contingent liabilities of more than £1 million in either this financial year or prior financial
year. Other liabilities are disclosed in our partner organisation accounts.
Basis of
Recognition
Description
Unquantifiable
Coal Authority -
Environmental Legal
Claims
Under the Environmental Information Regulations 2004 - The Coal Authority is aware
of potential legal proceedings in respect of past fees paid for Mining Information. In the
eventuality of receiving formal notification to commence legal proceedings, the Coal Authority
will strongly defend its position.
Coal Authority -
Legal claims
The Coal Authority is subject to various claims and legal actions in the ordinary course of its
activities. Where appropriate, provisions are made in the accounts on the basis of information
available and in accordance with guidance provided under the FReM and IFRS. The Coal
Authority does not expect that the outcome of the above issues will materially affect its
financial position.
Coal Authority
- Restructuring
Scheme
Where liabilities transferred under the various Coal Authority Restructuring Schemes (CARS)
have crystallised due to planning conditions, agreements, claims etc, provision has been
made in these financial statements. It has not, however, been possible to quantify contingent
liabilities that may arise in the future. It is expected that any costs will be covered by future
allocations of grant in aid.
Coal Authority
- Subsidence
damage and public
safety liabilities
Licensees of mining operations are required to provide security to the Coal Authority to
cover the anticipated future costs of settling subsidence damage liabilities within their areas
of responsibility. Outside the areas of responsibility of the holders of licences under Part II
of the 1994 Act, the Coal Authority is responsible for making good subsidence damage.
Where an area of responsibility is extinguished this would transfer to the Coal Authority who
would become responsible for the discharge of outstanding subsidence liabilities. The Coal
Authority also has an ongoing liability to secure and keep secured the majority of abandoned
coal mines. In all cases the liability for operating collieries is the responsibility of the licensees/
lessees and security is held to address those liabilities. The above liabilities have been
provided for within the Public Safety and Subsidence provision based on analysis of trends
and claims experience. However it is possible that significant, unexpected events outside
of this provision may materialise. It is expected that any deficit will be covered by future
allocations of grant in aid.
CNPA - Legal
Claims
There are a number of potential liabilities in respect of claims from employees, which depend
on actual or potential proceedings. The timing and amounts of any payment are uncertain.
These liabilities have not been provided for as the CNPA believes that the claims are unlikely
to be successful and unlikely to lead to a transfer of economic benefits.
CNPA - MFSS
The CNPA has a liability arising through its association with the Multi Force Shared Service
(MFSS) for a share of costs incurred. The timing and amount of this liability is uncertain
Insolvency Service -
Cheques Act 1992
Following the enactment of the Cheques Act 1992, the Secretary of State for BEIS has
indemnified the Insolvency Service’s bankers against certain liabilities arising in respect
of non-transferable “account payee” cheques due to insolvent estates and paid into the
accounts of the agency. The Police Information Technology Organisation (Home Office)
provides the Criminal Enforcement Team (formerly part of BEIS) with access to data from the
Police National Computer (PNC). The Insolvency Service (and BEIS) has indemnified the police
against any liabilities which they might incur as a result of providing that access.
Insolvency Service:
Police Information
Technology
Organisation
The Police Information Technology Organisation (Home Office) provides the Criminal
Enforcement Team (formerly part of BEIS) with access to data from the Police National
Computer (PNC). The Insolvency Service (and BEIS) has indemnified the police against any
liabilities which they might incur as a result of providing that access.

Annual report and accounts 2018-19
214
Basis of
Recognition
Description
NDA – Pension
Schemes
Whilst not the lead employer, the NDA is the lead organisation and has ultimate responsibility
for certain nuclear industry pension schemes, including the Combined Nuclear Pension
Plan, the Magnox section of the ESPS, and the GPS Pension Scheme. Provisions for known
deficits are included within Nuclear Provisions. However, movements in financial markets may
adversely impact the actuarial valuations of the schemes, resulting in an increase in scheme
deficits and consequent increase in nuclear provision
UKRI - Indemnity to
Roslin Institute
The former BBSRC sponsored Roslin institute transferred to the University of Edinburgh
on 13 May 2008. BBSRC agreed to provide indemnity for any potential costs that arise
as a result of past actions of the institute and indemnity for any fall in grant income of the
Neuropathogenesis Unit as a result of the transfer. The proportion of settlement UKRI will fund
declines on an annual basis and is limited to claims up to May 2023.
Others
There are a number of potential liabilities for the Department in respect of claims from
suppliers, employees and third parties which depend on actual or potential proceedings. The
timing and amounts of any liabilities are uncertain.
Quantifiable
BBB – Financial
guarantee
(£2 million)
Under the Bank’s Help to Grow financial guarantee programme, the Bank has entered in to
financial guarantee agreements of £30 million (31 March 2018: £60 million). The Bank has
guaranteed 75% of eligible lending to SMEs under these agreements and a counter guarantee
is in place that guarantees 50% of the Bank’s 75% of eligible lending. As at 31 March 2019
the amount lent under these financial guarantee agreements was £3.2 million (31 March 2018:
£1.8 million). During the year ending 31 March 2019 one of the guarantee agreements totalling
£30 million has expired with no amounts lent under it. Since the balance sheet date, the
remaining agreement totalling £30 million has expired with no further amounts being able to
be lent under it.
UKRI – (BBSRC)
Contamination
(£3 million)
As part of a Sale Agreement relating to a previous BBSRC site, BBSRC agreed to indemnify
the purchaser against contamination resulting from dangerous substances. The indemnity
was over a 10-year period commencing in 2013-14 and was capped at £3 million.
UKRI – (BBSRC)
Exit costs
(£31 million)
Prior to 31 March 2018, some staff at BBSRC strategically funded institutes were on BBSRC
terms and conditions. Whilst their direct salary costs are paid by the institutes, BBSRC is
liable for any exit costs for these staff. The date and number of staff to take exit packages in
any one year is unknown; however, if all staff were to take exit packages, the maximum liability
is estimated at £31M, with the amount declining on an annual basis up to March 2025.
UKRI –
(Innovate UK)
Decommissioning
costs (£2.6 million)
UKRI has a contingent liability which may arise if UKRI has to provide a grant to Narec (Natural
Renewable Energy Centre) in order for it to be able to decommission a weather monitoring
platform in the North Sea. This is currently collecting data to support the development of an
offshore wind test site. This may take place anytime between three and 25 years from now
dependent on the development of the site, at an estimated cost of £2.6 million.
UKRI –(MRC)
Dilapidation
(£0.6 million)
UK Research and Innovation (UKRI) has identified a contingent liability of £0.6 million
(31 March 2018 £1.8 million) for dilapidation works that may be required at the end of property
leases which are due to expire within the next year.
UKRI – (STFC)
Decommissioning
costs (£1.7 million)
A contingent liability exists for European Synchrotron Radiation Facility (ESRF)
decommissioning costs associated with the dismantling of the facility and infrastructures.
Decommissioning occurs on winding up of ESRF. If exit by the UK (or any other Member)
results in ESRF being wound up, the Members are required to arrange for decommissioning
of ESRF’s plant and buildings and to meet the costs of doing so in proportion to their share of
capital at the time of dissolution. The contingent liability is estimated to be £1.7 million

Financial Statements
215
Basis of
Recognition
Description
UKRI – (STFC)
Reprocessing and
staff commitments
(£13.6 million)
A contingent liability exists in respect of the Science and Technology Facilities Council
(STFC)’s share of Institut Laue-Langevin (ILL) unfunded provisions for staff related costs (e.g.
early retirement) and costs associated with reprocessing fuel elements. The contingent liability
is estimated to be £13.6 million (31 March 2018: £13.7 million).
UKRI – Tax Status
change (£30 million)
Prior to the creation of UKRI, the Research Councils paid levels of tax consistent with
charitable status, although they were not registered as charities. HMRC have indicated that,
due to changes in legislation, they may review whether the Research Councils should have
been applying charitable tax reliefs after 1 April 2012 without registering as charities. UKRI has
a contingent liability relating to the potential clawback of previously applied Value Added Tax
relief of £30 million.
UKAEA – JET
contract
(€30 million)
United Kingdom Atomic Energy Authority has a contingent liability (capped at €30 million and
approved by BEIS) in relation to the ongoing contract for JET operations with the European
Commission. The contingent liability relates to the costs of operating JET during the period
January 2020 to June 2021 in the event of key contract milestones not being met. The
likelihood of the indemnity being called on is considered possible.

Annual report and accounts 2018-19
216
25 Contingent assets
The core Department has the following contingent assets:
Basis of Recognition
Description
Quantifiable
Core Department - Deed
Relating to the British Coal
Staff Superannuation Scheme
(BCSSS) under Paragraph
2(9) of Schedule 5 to the Coal
Industry Act 1994 (£1.7 billion)
Within twelve months of 31 March 2033, the trustee of the BCSSS shall pay to
‘the Guarantor’ (the Secretary of State) any surplus remaining on the scheme net
of any amount retained for the obligation. The value of the surplus will depend on
the value of scheme assets in relation to outstanding obligations. Based on the
Government Actuary’s Department’s estimate of a £1.7 billion surplus as at 31
March 2015, the department considers a receipt from the scheme to be probable.
The Departmental Group has the following contingent assets:
Basis of Recognition
Description
Unquantifiable
Coal Authority - Restructuring
Schemes
By virtue of the seventh and ninth Coal Authority Restructuring Schemes (CARS 7
and 9) the Coal Authority is the beneficiary of restrictive covenants and clawback
provisions relating to land and properties sold by the British Coal Corporation. In
the event that the purchasers are able to retrospectively secure added value by
obtaining planning consent for alternative uses the Authority will receive a share of
the added value. Quantification of this asset is not possible.
Coal Authority - Allen Court –
Kirkcaldy
In excess of 25 damage notices have been submitted to the Coal Authority in
respect of subsidence damage to properties at Allen Court, Kirkcaldy.
£1.6 million of costs have been recognized as at 31 March 2019.
The property development was undertaken following the provision of a permit
by the Authority which incorporated indemnity clauses. The Coal Authority will
continue to strongly pursue resolution and expects to recover its costs from the
developer.
26 Related-party transactions
The core Department is the parent of the bodies listed in note 28 ‘List of bodies within the
Departmental Group’ – these bodies are regarded as related parties and various material transactions
have taken place during the reporting period between members of the Departmental Group. The
related parties of the consolidating bodies are disclosed in their respective accounts. The core
Department is also the sponsor of Companies House, UK Intellectual Property Office (UKIPO), Met
Office (Trading Funds), Ordnance Survey, NPL Management Limited, NNL Holdings Limited and
British Nuclear Fuels.
The core Department has had various material transactions with other Government departments,
Government bodies and devolved administrations comprising the Northern Ireland Executive, Scottish
Government and Welsh Government. The most significant of these transactions have been HM
Treasury, Post Office, HM Treasury’s consolidated fund, United Kingdom Research and Innovation,
Nuclear Decommissioning Authority, UK Space Agency, BBB plc, Nuclear Liabilities Fund and
Department for International Trade.
No minister, board member, key manager of the group or other related party have undertaken any
material transactions with the core Department during the year. Details of the department’s minsters
and senior mangers are shown in the Remuneration Report.

Financial Statements
217
Professor Dame Ann Dowling, Non-Executive Director of BEIS Departmental Board until May 2018
is an unpaid President and Chairman of the Board of Trustees of the Royal Academy of Engineering.
The Royal Academy of Engineering received £28 million in grants from the core Department
during the year.
Professor Dame Ann Dowling and her husband are employees of the University of Cambridge. The
University of Cambridge received payments of £377 million from UK Research and Innovation (UKRI)
during the year.
In the course of allocating funding during the year, UKRI entered into material transactions with various
Higher Education Institutions. Where these bodies have board members who are also members of
university councils, each body operates a policy that precludes interested parties from voting on the
funding to the university in which they have an interest. Further details of these transactions can be
found in statutory accounts of UKRI.
27 Restatement of Statement of Financial Position and
Statement of Comprehensive Net Expenditure as a
result of changes to the Departmental boundary and
other restatements
Machinery of Government (MoG) restatements
On 1 April 2018, the core Department and Departmental Group had three MoGs and these are
listed below;
Digital signatures
Responsibility for Digital Signatures including the trust service elements of the eIDAS Regulation
No 91012014, transferred from the core Department to the Department for Digital, Culture, Media
and Sport (DCMS). BEIS and DCMS will have a joint role in shaping the strategic relationship
with the Open Data Institute, The Alan Turing Institute and Digital Catapult. The core Department
and Departmental Group’s comparative net expenditure and net assets were not restated due to
the Machinery of Government change being immaterial to both the departments. Had the core
Department and Departmental Group’s comparative net expenditure been restated this would have
resulted in a reduction in the core Department and Departmental Group’s net expenditure for 2017-18
of £0.1 million and a £nil movement in the core Department and Departmental Group’s net assets.
Strategic geospatial data policy initiatives
Responsibility for strategic geospatial data policy initiatives from the core Department which
encompassed Public Sector Mapping Agreement, Postcode Address File and Open Source Data
Agreement, were transferred to Cabinet Office to support the work of the Geospatial Commission.
This resulted in the 2017-18 core Department and Department’s Group’s comparative net expenditure
being reduced by £78 million, a corresponding £78 million reduction in the core Department’s Net
parliamentary funding and a £0.1 million net assets movement.
UK Research and Innovation – Research England
Through the enactment of section 81 of the Higher Education and Research Act 2017, the Higher
Education Funding Council for England (HEFCE) ceased to exist and closed on 31 March 2018. A
transfer order was put in place at midnight on 31 March 2018 which transferred the remaining net
liabilities from HEFCE to the Secretary of State for Education and then directly onto two public bodies.
These were the Office for Students (OfS), sponsored by the Department for Education (DfE) and
Research England (RE), which forms part of UK Research and Innovation (UKRI), sponsored by the
core Department, both were established by the Higher Education and Research Act 2017.

Annual report and accounts 2018-19
218
The existing assets, liabilities and staff of HEFCE were transferred between these entities in a practical
way, which reflects the services they provide. Teaching and associated services are provided by
the OfS and Research, Knowledge Exchange and associated services are provided by Research
England. UKRI, have followed the FReM guidance to recognise the transfer of functions from HEFCE
as a Transfer by Absorption, this resulted in the existing assets and liabilities transferred from HEFCE
being recognised in UKRI at book values, without restating the prior year comparatives. From the
date of the transfer, the combined results of the functions being recognised and disclosed in UKRI’s
financial statements. In the core Department and Departmental Group, in accordance with the
FReM the transfer is recognised as a Transfer by Merger, with comparatives restated if the transfer is
material, to reflect the combined entity’s results as if they had always been combined.
The Departmental Group has not restated the prior year comparatives due to the impact on the
Departmental Group accounts and the Statement of Parliamentary Supply being immaterial. This is
because in previous years, the core Department funded, HEFCE via the Department for Education,
this funding of £2 billion in 2017-18 was recognised in note 4.4 Grants as Science and research grants
in the Departmental Group accounts, which is equivalent to the spend in HEFCE that would have
related to Research England. If the grant was removed and Research England’s prior year spend was
recognised, there would be an immaterial reclassification of £2.7 million from Science and research
grants in note 4,4, and note 3 Staff Costs. The comparatives for the core Department have been
restated, resulting in a £2 billion increase in Grant in Aid and corresponding reduction in Science
and Research expenditure. This restatement is reversed out on consolidation, recognising the spend
of Research England as Science and Research expenditure. Therefore, there is no impact on the
Departmental Group values.
Changes in accounting policy
Accounting policies for financial instruments and revenues from contracts with customers have been
updated to reflect the new accounting standards IFRS 9 ‘Financial Instruments’ and IFRS 15 ‘Revenue
from Contracts with Customers’ adopted in year. The FReM removes the option to adopt IFRS 9
and IFRS 15 retrospectively, and therefore no restatements are required to the prior year figures.
Any differences between the previous carrying amount and the carrying amount under the new
accounting standards have been recognised as adjustments to opening balances on 1 April 2018.
Detail of the impacts is discussed in note 1.6.
All investment classifications and accounting judgements in relation to the adoption of IFRS 9 in 2018-
19 have been re-assessed, and as a result of this work, the department’s 33% ordinary shareholding
in URENCO has been reclassified from an investment under IFRS 9/IAS 39 to an associate under
IAS 28. The net financial statement impact of this for 2017-18 is £72 million to the Statement of
Consolidated Net Expenditure, no restatement has been made.

Financial Statements
219
Impact of restatements on opening balances for the Departmental Group at 1 April 2018
Balance at 31
March 2018
per 2017-18
published
accounts
Machinery of
Government
changes
Restated
balance at 31
March 2018
New
accounting
standard
IFRS 9
Restated
balance at 1
April 2018
£m
£m
£m
£m
£m
Consolidated Statement
of Comprehensive Net
Expenditure
Net expenditure for the period
86,489
(78)
86,411
-
86,411
Other comprehensive net income
and expenditure
(351)
-
(351)
-
(351)
Total comprehensive
expenditure
86,138
(78)
86,060
-
86,060
Consolidated Statement of
Financial Position
Non-current assets
14,409
-
14,409
32
14,441
Current assets
4,328
-
4,328
(2)
4,326
Current liabilities
(8,313)
-
(8,313)
-
(8,313)
Non-current liabilities
(257,139)
-
(257,139)
(15)
(257,154)
General fund
250,098
-
250,098
(941)
249,157
Revaluation reserve
(2,915)
-
(2,915)
926
(1,989)
Charitable funds
(314)
-
(314)
-
(314)
Non-controlling interests
(154)
-
(154)
-
(154)
Statement of Parliamentary
Supply
Resource DEL
1,720
(5)
1,715
-
1,715
Capital DEL
10,464
(73)
10,391
-
10,391
Resource AME
75,124
-
75,124
-
75,124
Capital AME
(1,197)
-
(1,197)
-
(1,197)
Net outturn for the year
86,111
(78)
86,033
-
86,033

Annual report and accounts 2018-19
220
28 List of bodies within the Departmental Group

The table below shows the list of BEIS organisations that are included in the Government Resources
and Accounts Act 2000 (Estimates and Accounts) Order 2018, known as the Designation Order. The
individual Annual Report and Accounts for each of these bodies can be found on their own websites
or via the Inside Government website (https://www.gov.uk/government/organisations/department-for-
business-energy-and-industrial-strategy).
The bodies whose accounts have been consolidated within the Departmental Group accounts are
shown in section (a) of the table. Bodies within the Departmental Group but not consolidated, such
as where net assets are not considered material to the Departmental Group accounts, are indicated
separately in section (b) of this table.
As a result of changes made in the 2018-19 Designation Order, some additional bodies are now
included in the Departmental Group accounts boundary. Where boundary changes have an impact
on previously reported financial results, these are shown in Note 27.
Designated Body
(linked bodies are indicated in italics below
their parent body)
Status
Website
(further information about linked bodies or
those closed during the year is also included)
(a) Bodies consolidated in Departmental Group accounts for 2018-19
Executive Agencies
Insolvency Service
Executive Agency
gov.uk/government/organisations/insolvency-
service
UK Space Agency
Executive Agency
gov.uk/government/organisations/uk-space-
agency
NDPBs and other designated bodies2
Advisory, Conciliation and Arbitration
Service1
NDPB
acas.org.uk
Central Arbitration Committee
Linked but
independent
institution of ACAS
Consolidated by ACAS
Certification Office for Trade Union and
Employers’ Associations
Linked but
independent
institution of ACAS
Consolidated by ACAS
BIS (Postal Services Act 2011) Company
Limited
Limited Company
owned by BEIS
beta.companieshouse.gov.uk/
company/xx-xxxx-xxxx
British Business Bank plc
Public Limited
Company owned
by BEIS
british-business-bank.co.uk
BBB Patient Capital Holdings Limited
Limited Company
Consolidated by British Business Bank plc
British Business Investments Ltd
Limited Company
Consolidated by British Business Bank plc
British Business Finance Ltd
Limited Company
Consolidated by British Business Bank plc
British Business Financial Services Ltd
Limited Company
Consolidated by British Business Bank plc

Financial Statements
221
British Business Aspire Holdco Ltd
Limited Company
Consolidated by British Business Bank plc
British Patient Capital Limited
Limited Company
Consolidated by British Business Bank plc
Capital for Enterprise Fund Managers
Limited
Limited Company
Consolidated by British Business Bank plc
Capital for Enterprise (GP) Limited
Limited Company
Consolidated by British Business Bank plc
Capital for Enterprise Limited
Limited Company
Consolidated by British Business Bank plc
The Start-Up Loans Company
Limited Company
Consolidated by British Business Bank plc
Civil Nuclear Police Authority1
NDPB
gov.uk/government/organisations/civil-
nuclear-police-authority
Coal Authority1
NDPB
gov.uk/government/organisations/the-coal-
authority
Committee on Fuel Poverty
NDPB
gov.uk/government/organisations/committee-
on-fuel-poverty
Costs are included in the core Department’s
expenditure.
Committee on Radioactive Waste
Management
NDPB
gov.uk/government/organisations/committee-
on-radioactive-waste-management
Costs are included in the core Department’s
expenditure.
Competition Service
NDPB
catribunal.org.uk/244/Competition-Service.
html
Competition Appeal Tribunal
NDPB
catribunal.org.uk
The Copyright Tribunal
NDPB
gov.uk/government/organisations/copyright-
tribunal
No accounts produced as costs are included
in the core Department’s expenditure. It
is funded by BEIS and operated by UK
Intellectual Property Office.
Cornwall and Isles of Scilly Investments
Limited
Limited Company
owned by BEIS
https://british-business-bank.co.uk/
ourpartners/cornwall-isles-scilly-investment-
fund-ciosif/
Council for Science and Technology
Expert Committee
gov.uk/government/organisations/council-for-
science-and-technology
No accounts produced as costs are included
in the core Department’s expenditure.
Diamond Light Source Limited
Limited Company
diamond.ac.uk
Dounreay Site Restoration Limited
Limited Company
dounreay.com
Site Licence Company - private company,
which operates sites on behalf of, and under
contract from the NDA.
Enrichment Holdings Ltd
Limited Company
owned by BEIS
This is a special purpose vehicle for the
Government’s investment in Urenco Limited.

Annual report and accounts 2018-19
222
Enrichment Investments Limited
Limited Company
Consolidated by Enrichment Holdings Limited
Electricity Settlements Company Ltd
Limited Company
owned by BEIS
emrsettlement.co.uk/
Fleetbank Funding Limited
Limited Company
owned by BEIS
This is a vehicle for the Government to
facilitate the Enable Loan Guarantee Scheme
The Financial Reporting Council Limited
Limited Company
frc.org.uk
Harwell Science and Innovation Campus
Public Sector Limited Partnership
Limited
Partnership
Joint venture owned by UKRI and UK Atomic
Energy Authority
Industrial Development Advisory Board
Expert Committee
gov.uk/government/organisations/industrial-
development-advisory-board
No accounts produced. Funded by BEIS and
operated by the Insolvency Service. Costs are
included as part of the core Department.
LLW Repository Limited
Limited Company
llwrsite.com
Site Licence Company - private company,
which operates sites on behalf of, and under
contract from the NDA.
Low Carbon Contracts Company Ltd
Limited Company
owned by BEIS
lowcarboncontracts.uk/
Low Pay Commission
NDPB
gov.uk/government/organisations/low-pay-
commission
No accounts produced as costs are included
in the core Department’s expenditure
Magnox Limited
Limited Company
magnoxsites.com
Site Licence Company - private company,
which operates sites on behalf of, and under
contract from the NDA.
Midlands Engine Investments Limited
Limited Company
owned by BEIS
british-business-bank.co.uk/ourpartners/
midlands-engine-investment-fund/
The NESTA Trust
Charitable Trust
nesta.org.uk/faqs/what_is_the_nesta_trust
Northern Powerhouse Investments Limited
Limited Company
owned by BEIS
british-business-bank.co.uk/ourpartners/
northern-powerhouse-investment-fund/
Nuclear Decommissioning Authority1
NDPB
gov.uk/government/organisations/nuclear-
decommissioning-authority
Radioactive Waste Management Limited
Limited Company
Consolidated by Nuclear Decommissioning
Authority
Sellafield Limited
Limited Company
sellafieldsites.com/
Site Licence Company - private company,
which operates sites on behalf of, and under
contract from the NDA.

Financial Statements
223
Nuclear Liabilities Financing Assurance
Board
Expert Committee
gov.uk/government/organisations/nuclear-
liabilities-financing-assurance-board
Costs are included in the core Department’s
expenditure.
Office of Manpower Economics1
Part of the core
Department
gov.uk/government/organisations/office-of-
manpower-economics
No accounts produced as costs are included
in the core Department’s expenditure.
Oil and Gas Authority
Limited Company
owned by BEIS
ogauthority.co.uk/
Postal Services Holding Company Limited
Limited Company
owned by BEIS
Company in liquidation. Former holding
company for the Government’s investment in
Post Office Limited.
Regulatory Policy Committee
NDPB
gov.uk/government/organisations/regulatory-
policy-committee
No accounts produced as costs are included
in the core Department’s expenditure.
South Tees Site Company Limited
Limited Company
owned by BEIS
https://www.southteesdc.com/about-us/
south-tees-site-company-ltd/
This is a vehicle for managing the Government
investment in the South Tees Site
UK Climate Investments LLP
Limited
Partnership
between BEIS
and UK Green
Investment Bank
greeninvestmentbank.com/funds/
international/
UK Climate Investments Indigo Limited
Limited Company
Consolidated by the UK Climate Investments
LLP
UK Climate Investments Lakeside Limited
Limited Company
Consolidated by the UK Climate Investments
LLP
UK Climate Investments VC Limited
Limited Company
Consolidated by the UK Climate Investments
LLP
UK Green Infrastructure Platform Limited
Limited Company
owned by BEIS
Investment vehicle managed by UK Green
Investment Bank Limited on behalf of BEIS.
United Kingdom Research and Innovation
NDPB
https://www.ukri.org/
The Arts and Humanities Research Council1
NDPB
Former Research Council now part of UKRI
The Biotechnology and Biological Sciences
Research Council1
NDPB
Former Research Council now part of UKRI
The Economic and Social Research Council1
NDPB
Former Research Council now part of UKRI
The Engineering and Physical Sciences
Research Council1
NDPB
Former Research Council now part of UKRI
Medical Research Council1
NDPB
Former Research Council now part of UKRI
The Natural Environment Research Council1
NDPB
Former Research Council now part of UKRI

Annual report and accounts 2018-19
224
The Science and Technology Facilities
Council (STFC)1
NDPB
Former Research Council now part of UKRI
Innovate UK (trading name of The
Technology Strategy Board)
NDPB
Former Research Council now part of UKRI
Innovate UK Loans Limited
Limited Company
Consolidated by UKRI
STFC Innovations Limited
Limited Company
Consolidated by UKRI
UK Shared Business Services Limited
Limited Company
uksbs.co.uk
United Kingdom Atomic Energy Authority1
NDPB
gov.uk/government/organisations/uk-atomic-
energy-authority (corporate)
ccfe.ac.uk (fusion research)
AEA Insurance Limited
Limited Company
Consolidated by United Kingdom Atomic
Energy Authority
(b) Bodies not consolidated in Departmental Group accounts for 2018-19
British Hallmarking Council
NDPB
gov.uk/government/organisations/british-
hallmarking-council
Turnover and net assets are not material to
Departmental Group accounts.
Committee on Climate Change1
NDPB
theccc.org.uk/about/
Turnover and net assets are not material to
Departmental Group accounts.
Daresbury SIC (PubSec) LLP
Limited Liability
Partnership
https://beta.companieshouse.gov.uk/
company/OC360004
A joint venture between the Science and
Technology Facilities Council and Halton
Borough Council. Turnover and net assets are
not material to Departmental Group accounts.
Daresbury Science & Innovation Campus
Limited
Company Limited
by Guarantee
www.sci-techdaresbury.com
A joint venture between the Science and
Technology Facilities Council and Langtree.
Turnover and net assets are not material to
Departmental Group accounts.
East Midlands Early Growth Fund Limited
Limited Company
owned by BEIS
Recorded as investment in core Department
accounts. Turnover and net assets are not
material to Departmental Group accounts.
Groceries Code Adjudicator
Office Holder and
Corporation Sole
gov.uk/government/organisations/groceries-
code-adjudicator
Turnover and net assets are not material to
Departmental Group accounts.
NDA Archives Limited
Limited Company
gov.uk/government/organisations/nuclear-
decommissioning-authority
Turnover and net assets are not material to
Departmental Group accounts.

Financial Statements
225
NW VCLF HF LLP
Limited Liability
Partnership
Recorded as investment in core Department
accounts. Turnover and net assets are not
material to Departmental Group accounts.
Pubs Code Adjudicator
Office Holder and
Corporation Sole
gov.uk/government/organisations/pubs-code-
adjudicator
Turnover and net assets are not material to
Departmental Group accounts.
Research Sites Restoration Limited
Limited Company
Dormant – Site Licence Company
No costs or activities incurred in 2018-19
as the activities transferred to Magnox in
2016-17.
Small Business Commissioner
NDPB
https://www.smallbusinesscommissioner.gov.
uk/
Turnover and net assets are not material to
Departmental Group accounts.
Notes:
1. Entities fall in scope of the Trade Union (Facility Time Publication Requirements) Regulations 2017. Disclosure regarding
Facility Time can be found in the relevant accounts.
2. During 2018-19 the Office of National Statistics (ONS) reclassified two of the department’s non-consolidated Executive
Agencies, HM Land Registry and Companies House, from Public Corporations to Central Government Bodies. This
reclassification would result in these entities being consolidated into the Departmental Group accounts from ONS’s
reclassification. However, the department has received a derogation from HM Treasury to not consolidate these entities,
until their Trading Fund status is revoked in Parliament, which is scheduled for 2020-21.
29 Events after the Reporting Period
Non-adjusting events
On 11 April 2019, the government confirmed agreement with the EU on an extension of Article
50, until 31 October 2019 at the latest, with the option to leave earlier as soon as a deal has been
ratified. The department has disclosed a remote contingent liability in relation to EU Exit and the
HM Government guarantee in the Parliamentary accountability disclosures in the Accountability
report on page 105.
On 23 April 2019, it was announced that the responsibility for business Greenhouse Gas reporting
guidance and regulations will transfer from the Department for Environment, Food and Rural Affairs to
the Department for Business, Energy and Industrial Strategy.
29.1 Date Accounts authorised for issue
BEIS’s Accounting Officer has authorised these Accounts to be issued on the same day as they
were certified.

Trust
Statement
The UK is a world leader in clean growth and low carbon
services, whilst growing our national income.

Trust Statement
227
Accounting Officer’s foreword
to the Trust Statement
Introduction and scope
The Department for Business, Energy and
Industrial Strategy (BEIS) is responsible for
collection of revenue, expenditure and cash flows
for the schemes listed below. These amounts
are collected by the Department for payment
to the Consolidated fund. The Trust Statement
also provides disclosure of any material income
or expenditure not applied to the purposes
Parliament intended or not conformed to the
governing authorities.
• EU Emissions Trading Scheme
• Carbon Reduction Commitment
• Climate Change Agreements
• Energy Savings Opportunity Scheme
The EU Emissions Trading
Scheme
Background
The EU Emissions Trading Scheme (ETS) is the
largest multi-country, multi-sector greenhouse
gas emissions trading system in the world. It
includes more than 11,000 power stations and
industrial plants across the EU with around 1,000
of these in the UK. These include power stations,
oil refineries, offshore platforms and industries
that produce iron and steel, cement and lime,
paper, glass, ceramics and chemicals.
Other organisations, including universities
and hospitals, may also be covered by
the EU ETS depending upon the combustion
capacity of equipment at their sites. Aviation
operators flying into or from a European airport
are also covered by the EU ETS.
The EU ETS works on a ‘cap and trade’
basis: there is a ‘cap’ or limit set on the
total greenhouse gas emissions allowed by
participants covered by the System. This cap is
converted into tradable emission allowances.
Tradable emission allowances are allocated to
participants in the market; in the EU ETS this is
done via a mixture of free allocation and auctions.
One allowance gives the holder the right to emit
one tonne of CO2 (or its equivalent). Participants
covered by the EU ETS must monitor and report
their emissions each year and surrender enough
allowances to cover their annual emissions.
Participants who are likely to emit more than
their allocation have a choice between taking
measures to reduce their emissions or buying
additional allowances, either bilaterally between
operators from the secondary carbon market or
from Member State-held auctions.
The carbon price signifies the amount paid per
EU Allowance (EUA) which is based on demand
and supply. There are currently separate EU
Aviation Allowances (EUAA) for airline operators.
The first phase of the EU ETS ran from 2005 to
2007 and the second phase ran from 2008 to
2012 to coincide with the first Kyoto Commitment
Period. The EU ETS is now in Phase III (2013
to 2020), and this builds upon the previous two
phases ensuring a greater contribution to tackling
climate change. There is a single EU-wide cap
for Phase III. Each Member State was required
to submit a list of all the participants that will be
included in Phase III, setting out its proposed
levels of free allocation in accordance with the
revised ETS Directive.
The UK Government appointed ICE Futures
Europe to conduct auctions of EU ETS Phase III
on its behalf from November 2012. An extension
of two years (the maximum allowed for in the EU
Auctioning Regulation), was then permitted until
November 2017. Following an open-competition
through the Official Journal of the European
Union to re-procure the UK’s auction platform
upon expiry of the original contract, ICE Futures
Europe were awarded a new contract to conduct
UK auctions from November 2017. The auction
calendars from 2013 to 2018 are available on the
ICE auctions web pages at www.theice.com/
emissions/auctions
The UK held 19 auctions of EUA allowances in
2018-19. A total of 82.679 million allowances
were auctioned successfully. There was one
EUAA auction of 860,000 allowances held
in 2018-19.

Annual report and accounts 2018-19
228
Future developments
In December 2018 the European Commission
confirmed that from 01 January 2019 the
relevant processes for the UK in the Union
Registry would be temporarily suspended until
the day after ratification instruments concerning
the withdrawal agreement are deposited. As
stated on the Commission website: ‘from 1
January 2019 onwards the UK will not be able
to auction allowances, allocate allowances for
free to operators or exchange international
credits for as long as this suspension remains
in place’. In line with the suspension notification
of the Commission, the UK government will not
issue any 2019 allowances unless and until the
suspension is lifted.
On leaving the EU, the UK Government and
Devolved Administrations have clearly stated their
preference for a UK national greenhouse gas
emissions trading system (UK ETS) linked to the
EU ETS as set out in the Political Declaration.
Linking a UK ETS to the EU ETS is subject
to negotiations and cannot be guaranteed.
Therefore potential ‘fall-back’ options remain
in consideration in the event that a linked ETS
cannot be achieved. Fall-back options do not
preclude the opportunity to achieve a linked
carbon pricing system in the future and include
the UK introducing its own UK ETS, which would
not be linked to the EU ETS, the introduction of
a tax on carbon, and participating in Phase IV of
the EU ETS. All options will deliver on the Clean
Growth Strategy commitments: any carbon
pricing system will be at least as ambitious as
remaining in the EU ETS and deliver a smooth
transition for businesses.
Financial summary
The UK held 19 EUA auctions and 1 EUAA
auction. This yielded a total income of
£1,271 million (2017-18: £571 million) – as shown
in note 2.2 of the Trust Statement. All auctions
were wholly competitive auctions. The increase
in income in 2018-19 was due to an increase
in price of EU ETS allowances over the period
compared to 2017-18.
The total income was passed to the Consolidated
Fund within a few days of each auction. Auctions
were completed in Euros and converted to
sterling. Exchange rate differences amounted to
£1,248,000 (2017-18: £424,000). The exchange
differences are recognised in the Statement of
Revenue, Other Income and Expenditure.
The Environmental Agency, as regulator, imposed
204 civil penalties amounting to £2,635,535
(2017-18: 137 penalties totalling £1,892,941).
Most of the penalties relate to non-compliance
in meeting installation targets under the UK
small emitter opt-out scheme, for those who
have opted-out of the main requirements of
the ETS. The opt-out requires that installations
must keep their emissions below a set target. A
penalty is charged for every tonne of CO2 above
the emission target. Some of these penalties
(for example on aviation) relate to previous
compliance years.
OPRED (Offshore Petroleum Regulator for
Environment and Decommissioning) also issued
5 penalties in 2018-19, amounting to £109,553
(2017-18: 7 penalties totalling £127,643).
The offshore industry is regulated by OPRED, a
discrete directorate within BEIS. The sanctions
relate to a backlog of failures to surrender
sufficient allowances and to comply with a
permit condition. OPRED expects the number
of penalties to increase as they identify more
compliance issues. The relevant Civil Sanctions
Guidance has been published alongside the
civil penalties. The costs associated with
administering the scheme were borne by the
Department – shown in note 3 and included
within the Department’s Accounts.
Carbon Reduction
Commitment Energy
Efficiency Scheme
Background
The Carbon Reduction Commitment Energy
Efficiency Scheme (CRC) is a mandatory scheme
covering large, non-energy intensive, users of
energy in the public and private sectors (5,000+
organisations). The organisations must use over
6GWh of qualifying electricity and therefore must
monitor their energy use and report their energy
supplies annually. They must buy allowances
for each tonne of carbon dioxide equivalent of
emissions. In March 2016 it was announced
that the CRC scheme would close following the
2018-19 compliance year to simplify the business
energy efficiency tax landscape. Organisations
will report under the CRC for the last time by
the end of July 2019 and surrender allowances
for emissions from energy supplied in the 2018-
19 compliance year by the end of October
2019. Participants in the scheme are required

Trust Statement
229
to maintain their records until 2025 so they are
available for audit. The CRC regulations specify
that refunds maybe granted up to 2025, BEIS are
currently considering the approach to handling
refund requests post 31 March 2022.
The Streamlined Energy and Carbon Reporting
framework (SECR) launched on 1 April 2019
and replaces the reporting elements of the CRC
energy efficiency scheme.
The financial year 2018-19 saw the fifth forecast
sale for Phase II of the scheme (for compliance
year 2018-19) and the fourth buy-to-comply sale
(for compliance year 2017-18). The prices across
the scheme are as follows;
CRC scheme
year
Compliance
sale price
Forecast sale
price
2018-19
£18.30
£17.20
2017-18
£17.70
£16.60
2016-17
£17.20
£16.10
2015-16
£16.90
£15.60
2014-15
£16.40
£15.60
Financial summary
Allowance sales under the CRC scheme in 2018-
19 generated £440 million (2017-18: £580 million).
There were 6 civil penalties levied against CRC
participants. The civil penalties amounted to
£69,090 (2017- 18: £49,000). The costs incurred
in administering the CRC Scheme were borne by
the Department as shown in note 3 and included
within the Department’s Accounts.
Climate Change Agreements
Background
Climate Change Agreements (CCAs) are
voluntary agreements that allow businesses
in 53 energy intensive sectors to receive up to
a 93% reduction in the Climate Change Levy
(CCL) in exchange for meeting stretching energy
efficiency/carbon targets. The CCA scheme was
launched on 1 April 2013 and runs until 31 March
2023. If all sectors meet their targets from 2013
to 2020 against agreed baselines, the scheme is
estimated to deliver a reduction in emissions of
19 metric tonnes CO2 (based on a 2008 baseline)
and savings to participants on the CCL of
between £200-£300 million each year.
The CCA generates three potential
money streams:
Charging income
Paid by CCA participants to the Administrator on
an annual basis, in accordance with a charging
scheme established under paragraph 52C
Finance Act 2000, Schedule 6 (as amended by
Finance Act 2012). These monies are retained by
the Environment Agency and will not feature in
the Trust Statement.
Civil penalties
Payments received by the Administrator for minor
infractions, passed by the Department to the
Consolidated Fund in accordance with powers
given in 52F Finance Act 2000, Schedule 6 (as
amended by Finance Act 2012). The amounts
are specified in The Climate Change Agreements
(Administration) Regulations 2012.
Buy-out payments
Payments made by participants at the end of
each 2-year target period in cases where CCA
targets are not met. For the first two target
periods for the scheme up to 31 December
2016, payments were calculated on the basis
of £12 per tonne of CO2 by which the target is
exceeded. From 1 January 2017, this has been
increased to £14 per tonne of CO2, for which
the powers are given in 52F Finance Act 2000,
Schedule 6 (as amended by Finance Act 2012).
The amount is specified in The Climate Change
Agreements (Administration) Regulations 2012
(as amended in 2016). The collection of buy-
out payment income commenced in 2015-16 in
respect of the first Target Reporting Period and
will continue for both buy-out payments and civil
penalties, until the scheme ends in 2023. The
income distribution is explained under the section
on Financial Review.
Future developments
BEIS are currently evaluating the CCA scheme,
this will conclude by the end of 2019 with a
report published by the end of March 2020. This
will help inform any potential future CCA scheme.
Financial summary
In 2018-19, the income from buy-out payments
generated £107,760 (£22.966 million in 2017-18),
– as shown in note 2.3 of the Trust Statement.
The lower income in the current reporting year
was due to 2018-19 being a period of secondary

Annual report and accounts 2018-19
230
reporting for Target Reporting Period II, where
participants make further top-up buy-out
payments after an audit or they receive a refund
if they have been overpaid. By comparison
the prior year comparatives reflect the primary
reporting period income for Target Reporting
Period II.
2 civil penalties were issued under the CCA
scheme for the first time totalling £565 income.
Energy Savings Opportunity
Scheme
Background
The Energy Savings Opportunity Scheme (ESOS)
is an energy assessment scheme, mandatory for
all large undertakings in the UK. The Government
established ESOS in response to the
requirements of Article 8 (4-6) of the EU Energy
Efficiency Directive. Qualifying organisations
must carry out audits every 4 years of the energy
used by their buildings, industrial processes
and transport to identify cost-effective energy
saving measures. We are now in the second
phase of the scheme, which commenced on
31 December 2018. The scheme runs until 5
December 2027.
In Phase 1 there were 6,075 Ultimate Parent
organisations in the scheme. The Environment
Agency and equivalent regulators in the devolved
administrations are responsible for ensuring
ESOS compliance. Participants who fail to
comply with the scheme could be fined up to
£50,000. The first penalties under ESOS were
imposed in March 2018. ESOS is estimated
to deliver a net benefit to the UK of £1.6 billion
(between 2015-2030).
There are currently no charges for registering
with the scheme.
Future developments
BEIS are currently evaluating ESOS to identify
any potential changes to the scheme, especially
in relation to supporting the ambition to enable
businesses and industry to improve energy
efficiency by at least 20% by 2030.
Financial summary
The income stream consists of non-compliance
penalties. 28 penalties totalling £272,202
were issued in 2018-19 (2017-18: 5 penalties
totalling £17,110)
Remote contingent liabilities
Audited information
On 29 March 2017, the UK Government
submitted its notification to leave the EU in
accordance with Article 50. The triggering of
Article 50 started a two-year negotiation process
between the UK and the EU. On 11 April 2019,
the government confirmed agreement with the
EU on an extension until 31 October 2019 at the
latest, with the option to leave earlier as soon
as a deal has been ratified. Any subsequent
changes in legislation, regulation and funding
arrangements are subject to the outcome of
the negotiations. As a result, an unquantifiable
contingent liability is disclosed. In accordance
with accounting standards, no contingent assets
can be recognised.
Further information on the core Department’s
remote contingent liability relating to the UK
leaving the EU is detailed on page 105.
Auditors
These financial statements have been audited,
under the Exchequer and Audit Departments Act
1921, by the Comptroller and Auditor General,
who is appointed under statute and reports to
Parliament. The audit opinion is on 234 to 236.
The auditor’s notional remuneration is included
within the Department’s Accounts. There were
no fees in respect of non-audit work.
Basis for preparation
The HM Treasury Accounts Direction, issued
in accordance with Section 2 of the Exchequer
and Audit Departments Act 1921 requires the
Department to prepare the Trust Statement to
give a true and fair view of the state of affairs
relating to the collection and allocation of the
carbon allowance auction receipts for the EU
Emissions Trading Schemes, the allowances
sales from the CRC scheme, buy-out payments
from the CCA Scheme and civil penalties
receivable under the EU ETS, CRC, CCA and
ESOS schemes. Regard is given to all relevant
accounting and disclosure requirements given
in Managing Public Money and other guidance
issued by HM Treasury.

Trust Statement
231
Accounting judgements
As the Accounting Officer, it is my responsibility
to apply suitable accounting policies in the
preparation of the Trust Statement. Revenues are
recognised in the period in which the event that
generates the revenue takes place, consequently
the anticipated proceeds from future auctions
and licences as detailed in note 2 are not
recognised as assets within this statement. All
the transactions within the Trust Statement reflect
transactions that have taken place.
Events after the reporting
period
Details of events after the reporting period are
given in note 10 to the Trust Statement.
Governance statement
The Department’s governance statement covers
both the Accounts and the Trust Statement,
and is included in the Governance section of
this report.
Alex Chisholm
Permanent Secretary and
Principal Accounting Officer
8 July 2019

Annual report and accounts 2018-19
232
Statement of Accounting Officer’s
responsibility for the Trust Statement
Under section 2 of the Exchequer and Audit
Departments Act 1921, HM Treasury has directed
the Department for Business, Energy and
Industrial Strategy to prepare for each financial
year a Trust Statement in the form and on the
basis set out in the Accounts Direction.
HM Treasury has appointed the Permanent
Secretary as Accounting Officer of the
Department for Business, Energy and Industrial
Strategy with overall responsibility for preparing
the Trust Statement and for transmitting it to the
Comptroller and Auditor General.
The Accounting Officer is responsible for
ensuring that: there is a high standard of
financial management, including a sound
system of internal control; that financial systems
and procedures promote the efficient and
economical conduct of business and safeguard
financial propriety and regularity; that financial
considerations are fully taken into account in
decisions on policy proposals; and that risk
is considered in relation to assessing value
for money.
The Accounting Officer is responsible for
the fair and efficient administration of the EU
ETS including conducting the auction of EU
Allowances in the UK for Phase III of the Scheme
and Aviation allowances of the EU ETS, collection
of the proceeds and onward transmission of
the funds in their entirety to the Consolidated
Fund. The Accounting Officer is also responsible
for the collection of CRC Allowances and CCA
buy-out payments for onward transmission to
the Consolidated Fund and, the collection of civil
penalties levied under the EU ETS, CCA, CRC,
and ESOS schemes for onward transmission to
the Consolidated Fund.
The responsibilities of the Accounting Officer,
including responsibility for the propriety and
regularity of the public finances for which an
Accounting Officer is answerable, for keeping
proper records and for safeguarding the
Department’s assets, are set out in Managing
Public Money published by HM Treasury.
The Trust Statement must give a true and
fair view of:
• the statement of affairs of the EU ETS, CCA
Schemes and penalties issued under the EU
ETS, ESOS, CCA and CRC Schemes
These streams of income are recognised on an
accruals basis;
• the state of affairs of the CRC Allowance
Scheme sales which are recognised on a cash
received basis
• the revenue collected, and expenditure
incurred together with the net amounts
surrendered to the Consolidated Fund
In preparing the Trust Statement, the
Accounting Officer is required to comply
with the requirements of the Government
Financial Reporting Manual and in
particular to:
• observe the Accounts Direction issued by HM
Treasury, 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 as set out in the Government
Financial Reporting Manual have been
followed, and disclose and explain any material
departures in the accounts
• prepare the Trust Statement on a going-
concern basis
Accounting Officer’s confirmation
I have taken all the steps that I ought to have
taken to make myself aware of any relevant
audit information and to establish that the
Department’s auditors are aware of that
information.

Trust Statement
233
The annual report and accounts as a whole
is fair, balanced and understandable. I take
personal responsibility for the annual report
and accounts and the judgements required
for determining that it is fair, balanced and
understandable.
Alex Chisholm
Permanent Secretary and
Principal Accounting Officer
8 July 2019

Annual report and accounts 2018-19
234
The Trust Statement Audit Report of the
Comptroller and Auditor General to the
House of Commons
Opinion on financial statements
I have audited the financial statements of
Department for Business, Energy and Industrial
Strategy Trust Statement (“the Trust Statement”)
for the year ended 31 March 2019 under the
Exchequer and Audit Departments Act 1921. The
financial statements comprise the Statement of
Revenue, Other Income and Expenditure, the
Statement of Financial Position, the Statement of
Cash Flows and the related notes, including the
significant accounting policies. These financial
statements have been prepared under the
accounting policies set out within them.
In my opinion:
• the Trust Statement gives a true and fair view
of the state of affairs of balances stemming
from: the collection of EU Emissions Trading
Scheme (ETS) auction receipts; Carbon
Reduction Commitment (CRC) allowance
sales; Climate Change Agreements (CCA)
receipts; and EU ETS, CRC, CCA, and Energy
Savings Opportunity Scheme (ESOS) civil
penalties as at 31 March 2019 and of the net
revenue for the year then ended; and
• the financial statements have been properly
prepared in accordance with the Exchequer
and Audit Departments Act 1921 and HM
Treasury directions issued thereunder.
Opinion on regularity
In my opinion, in all material respects the income
and expenditure recorded in the financial
statements have been applied to the purposes
intended by Parliament and the financial
transactions recorded in the financial statements
conform to the authorities which govern them.
Basis of opinions
I conducted my audit in accordance with
International Standards on Auditing (ISAs)
(UK) and Practice Note 10 ‘Audit of Financial
Statements of Public Sector Entities in the
United Kingdom’. My responsibilities under those
standards are further described in the Auditor’s
responsibilities for the audit of the financial
statements section of my certificate. Those
standards require me and my staff to comply
with the Financial Reporting Council’s Revised
Ethical Standard 2016. I am independent of
the Department in accordance with the ethical
requirements that are relevant to my audit and
the financial statements in the UK. My staff and
I have fulfilled our other ethical responsibilities in
accordance with these requirements. I believe
that the audit evidence I have obtained is
sufficient and appropriate to provide a basis for
my opinion.
Conclusions relating to going concern
I am required to conclude on the appropriateness
of management’s use of the going concern basis
of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists
related to events or conditions that may cast
significant doubt on the Department’s ability to
continue as a going concern for a period of at
least twelve months from the date of approval
of the financial statements. If I conclude that a
material uncertainty exists, I am required to draw
attention in my auditor’s report to the related
disclosures in the financial statements or, if
such disclosures are inadequate, to modify my
opinion. My conclusions are based on the audit
evidence obtained up to the date of my auditor’s
report. However, future events or conditions
may cause the entity to cease to continue as
a going concern. I have nothing to report in
these respects.
Responsibilities of the Accounting Officer
for the audit of the financial statements
As explained more fully in the Statement of
Accounting Officer’s responsibility for the Trust
Statement, the Accounting Officer is responsible
for the preparation of the financial statements
and for being satisfied that they give a true and
fair view.
Auditor’s responsibilities for the audit of the
financial statements
My responsibility is to audit, and report on the
financial statements in accordance with the
Exchequer and Audit Departments Act 1921.

Trust Statement
235
An audit involves obtaining evidence about
the amounts and disclosures in the financial
statements sufficient to give reasonable
assurance that the financial statements are free
from material misstatement, whether caused by
fraud or error. Reasonable assurance is a high
level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when
it exists. Misstatements can arise from fraud or
error and are considered material if, individually
or in the aggregate, they could reasonably be
expected to influence the economic decisions
of users taken on the basis of these financial
statements.
As part of an audit in accordance with ISAs
(UK), I exercise professional judgment and
maintain professional scepticism throughout the
audit. I also:
• identify and assess the risks of material
misstatement of the financial statements,
whether due to fraud or error, design and
perform audit procedures responsive to
those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis
for my opinion. The risk of not detecting a
material misstatement resulting from fraud
is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override
of internal control.
• obtain an understanding of internal control
relevant to the audit in order to design audit
procedures that are appropriate in the
circumstances, but not for the purpose of
expressing an opinion on the effectiveness of
the Department’s internal control.
• evaluate the appropriateness of accounting
policies used and the reasonableness of
accounting estimates and related disclosures
made by management.
• evaluate the overall presentation, structure and
content of the financial statements, including
the disclosures, and whether the consolidated
financial statements represent the underlying
transactions and events in a manner that
achieves fair presentation.
I communicate with those charged with
governance regarding, among other matters,
the planned scope and timing of the audit and
significant audit findings, including any significant
deficiencies in internal control that I identify
during my audit.
I am required to obtain evidence sufficient to
give reasonable assurance that the income and
expenditure recorded in the financial statements
have been applied to the purposes intended
by Parliament and the financial transactions
recorded in the financial statements conform to
the authorities which govern them.
Other information
The Accounting Officer is responsible for
the other information. The other information
comprises information included in the Accounting
Officer’s foreword to the Trust Statement
and Statement of the Accounting Officer’s
responsibility for the Trust Statement, but does
not include the financial statements and my
auditor’s report thereon. My opinion on the
financial statements does not cover the other
information and I do not express any form of
assurance conclusion thereon. In connection
with my audit of the financial statements, my
responsibility is to read the other information
and, in doing so, consider whether the other
information is materially inconsistent with
the financial statements or my knowledge
obtained in the audit or otherwise appears to
be materially misstated. If, based on the work
I have performed, I conclude that there is a
material misstatement of this other information, I
am required to report that fact. I have nothing to
report in this regard.
Opinion on other matters
In my opinion:
• the information given in the Accounting
Officer’s foreword to the Trust Statement
and Statement of the Accounting Officer’s
responsibility for the Trust Statement for the
financial year for which the financial statements
are prepared is consistent with the financial
statements.

Annual report and accounts 2018-19
236
Matters on which I report by exception
I have nothing to report in respect of the following
matters which I report to you if, in my opinion:
• adequate accounting records have not been
kept or returns adequate for my audit have not
been received from branches not visited by
my staff; or
• the financial statements are not in agreement
with the accounting records and returns; or
• I have not received all of the information and
explanations I require for my audit; or
• the Governance Statement does not reflect
compliance with HM Treasury’s guidance.
Gareth Davies
Comptroller and Auditor General
National Audit Office
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP
10 July 2019

Trust Statement
237
Statement of Revenue, Other income and
Expenditure
for the year ended 31 March 2019
2018-19
2017-18
Note
£’000
£’000
Revenue
Licence fees and taxes
Carbon Reduction Commitment allowance sales
2.1
440,280
580,201
EU Emissions Trading Scheme auction income
2.2
1,270,535
570,688
Climate Change Agreements buy-out payments income
2.3
108
22,966
Total licence fees and taxes
1,710,923
1,173,855
Fines and penalties
Civil penalties – EU Emissions Trading scheme
2.4
2,745
2,021
Civil penalties – Energy Savings Opportunity Scheme
2.4
272
17
Civil penalties – Carbon Reduction Commitment Scheme
2.4
69
49
Civil penalties – Climate Change Agreements
1
-
Total fines and penalties
3,087
2,087
Total revenue and other income
1,714,010
1,175,942
Expenditure
EU Emissions Trading Scheme costs
3.1
(1,269)
(432)
Credit losses – debts written off
3.2
-
(972)
Total expenditure
(1,269)
(1,404)
Net revenue for the Consolidated Fund
1,712,741
1,174,538
There were no recognised gains or losses accounted for outside of the above Statement of Revenue,
Other Income and Expenditure.
The notes on pages 240 to 245 form part of this statement.

Annual report and accounts 2018-19
238
Statement of Financial Position
as at 31 March 2019
31 Mar 2019
31 Mar 2018
Note
£’000
£’000
Current assets
Receivables and accrued fees
4
2,797
1,471
Cash and cash equivalents
5
27,898
23,921
Total current assets
30,695
25,392
Current liabilities
Payables
6
(324)
(404)
Total current liabilities
(324)
(404)
Net current assets
30,344
24,988
Total net assets
30,371
24,988
Represented by:
Balance on Consolidated Fund Accounts
7
30,371
24,988
The notes on pages 240 to 245 form part of this statement.
Alex Chisholm
Permanent Secretary and
Principal Accounting Officer
8 July 2019

Trust Statement
239
Statement of Cash Flows
for the year ended 31 March 2019
2018-19
2017-18
Note
£’000
£’000
Net cash flows from operating activities
A
1,711,335
1,175,406
Cash paid to the Consolidated Fund
7
(1,707,358)
(1,168,572)
Increase/(decrease) in cash in this period
B
3,977
6,834
Notes to the statement of Cash Flows
2018-19
2017-18
Note
£’000
£’000
A: Reconciliation of Net Cash Flow to Movement
in Net Funds
Net Revenue for the Consolidated Fund
7
1,712,741
1,174,538
(Increase)/decrease in receivables and accrued fees
4
(1,326)
982
Increase/(decrease) in payables
6
(80)
(114)
Net cash flows from operating activities
1,711,335
1,175,406
B: Analysis in changes in Net Funds
Increase/(decrease) in cash in this period
3,977
6,834
Net Funds as at 1 April (net cash at bank)
5
23,921
17,087
Net Funds as at 31 March (closing balance)
5
27,898
23,921

Annual report and accounts 2018-19
240
Notes to the Trust Statement
1 Statement of Accounting Policies
1.1
Basis of Accounting
The Trust Statement is prepared in accordance
with the accounts direction issued by HM
Treasury under section 2 of the Exchequer
and Audit Departments Act 1921. The Trust
Statement is prepared in accordance with
the accounting policies detailed below. These
have been agreed between the Department for
Business, Energy and Industrial Strategy (the
Department) and HM Treasury and have been
developed in accordance with International
Financial Reporting Standards (IFRS) and other
relevant guidance. The accounting policies have
been applied consistently in dealing with items
considered material in relation to the accounts.
The income and associated expenditure
contained in the Departmental Trust Statement
are those flows of funds which the Department
administers on behalf of the Consolidated Fund.
The financial information in the Trust Statement is
rounded to the nearest £’000.
The Trust Statement is presented in pounds
sterling, which is the functional currency of the
Department.
1.2
Accounting convention
The Trust Statement has been prepared in
accordance with the historical cost convention.
1.3
Revenue Recognition
IFRS 15 ‘Revenue from Contracts with
Customers’ was adopted on 1 April 2018.
This replaced IAS 18 ‘Revenue’ and IAS 11
‘Construction Contracts’. The FReM extends the
definition of a contract under IFRS 15 para 9 to
include legislation and regulations which enable
an entity to obtain revenue that is not classified
as a tax by the Office of National Statistics (ONS).
As both EU-ETS auction income and CRC
allowances sales are classified as taxes by ONS
and CCA income meets the definition of a tax
under ONS’s guidance, IFRS 15 is not applicable
to the material revenue streams of the BEIS Trust
Statement.
Income from these schemes is recognised
as follows:
• EU ETS receipts represent proceeds from the
auction of carbon allowances under Phase
III and aviation allowances of the EU ETS.
Revenue is recognised at the close of each
competitive auction, when the revenue can be
measured reliably.
• Revenue in respect of CRC allowance sales
is recognised on a cash received basis by
agreement with HM Treasury.
• Revenue in respect of CCA buy-out payments
is recognised on an accruals basis, albeit
the recognition point is when the income
is received.
• Revenue in respect of civil penalties is
recognised when the penalty is imposed.
In 2018-19, civil penalties for the CCA are
recognised for the first time.
All result in a cash flow to the Consolidated
Fund. This has resulted in no difference to the
income recognition methodology applied in
previous years.
CRC participants may request refunds for over-
surrendered allowances (note 9 Contingent
Liabilities refers). These are accounted for in the
period in which the refund request is authorised
and processed.
1.4
Financial instruments
A financial instrument is any contract that gives
rise to a financial asset of one entity and a
financial liability or equity instrument of another
entity. Financial assets and financial liabilities are
recognised in the Statement of Financial Position
when the Department becomes a party to the
contractual provisions of an instrument.

Trust Statement
241
1.5
Financial assets
For the purposes of this Trust Statement, the
Department holds financial assets in the following
categories:
• Receivables held at amortised cost;
• Cash and cash equivalent.
Both receivables and cash and cash equivalents
are held at amortised cost following the
adoption of IFRS 9 ‘Financial Instruments’ as a
replacement for IAS 39 ‘Financial Instruments:
Recognition and Measurement’ from 1 April
2018. There were no changes in terms of
measurement for these assets upon transition.
Receivables held at amortised cost comprise:
• for EU ETS the amounts due from Primary
Participants in respect of established auction
liabilities for which, at the financial year
end, payments had not been received. The
amounts due are calculated at the close of
each auction and have a maturity of less than
three months;
• civil penalties levied against participants in
the EU ETS, ESOS, CCA and CRC Schemes,
amounts for which have not been received at
the financial year end.
Cash and cash equivalents comprise current
balances with banks and other financial
institutions, which are readily convertible to
known amounts of cash and which are subject to
insignificant risk of changes in value and have an
original maturity of three months or less.
1.6
Financial liabilities
For the purposes of this Trust Statement the
Department holds financial liabilities in the
following category:
• Other financial liabilities
Other financial liabilities comprise:
• Payables in the Statement of Financial
Position. Payables are amounts established as
due at the reporting date, but where payment
is made subsequently. Since these balances
are expected to be settled within 12 months
of the reporting date there is no material
difference between fair value, amortised cost
and historical cost.
The adoption of IFRS 9 has not had a significant
effect on the Department’s accounting policies
for financial liabilities
1.7
Foreign currency
Transactions that are denominated in a foreign
currency are translated into sterling at the rate of
exchange ruling on the date of each transaction.
Monetary assets and liabilities denominated in
foreign currency at the year-end are translated
at the rates ruling at that date unless a forward
rate has been fixed with the Bank of England.
All translation differences are included in the
Statement of Revenue, Other Income and
Expenditure for the period.

Annual report and accounts 2018-19
242
2 Revenue
2.1
CRC allowance sales
2018-19
2017-18
£’000
£’000
Allowance sales
440,280
580,201
Total
440,280
580,201
2.2
EUETS auction income
2018-19
2017-18
£’000
£’000
Phase III
Auctions Income
1,258,836
565,933
Aviation
Auctions Income
11,699
4,755
Total
1,270,535
570,688
Dates for the carbon allowances auctions under
Phase III and Aviation schemes pertaining to the
EU ETS, along with number of units auctioned
are available on the Intercontinental Exchange
website on the auction calendar link at
www.theice.com/emissions/auctions
2.3
CCA buy-out payments income
2018-19
2017-18
£’000
£’000
Buy-out payment
income receivable
108
22,966
Total
108
22,966
In 2018-19, the income from buy-out payments
generated £107,760 (£22.966 million in 2017-
18). This is due to 2018-19 being a period of
secondary reporting for Target Reporting Period
ll which entailed top up payments as a result of
audit or refunds only. The income relating to buy-
out payments for the prior year comparatives is
higher since 2017-18 was the Primary Reporting
Period for Target Reporting Period II.
2.4
Civil penalties
2018-19
2017-18
£’000
£’000
Levied under EU
ETS Scheme
2,745
2,021
Levied under
ESOS Scheme
272
17
Levied under
CRC Scheme
69
49
Levied under
CCA Scheme
1
-
Total
3,087
2,087
There were 209 civil penalties totalling
£2,745,088 (2017-18: 144 penalties totalling
£2,020,584), levied under the EU ETS scheme
for the year under review. CRC penalties of
£69,090 were recognised in 2018-19 (2017-18:
£49,000). 28 penalties totalling £272,202 (2017-
18: 5 penalties totalling £17,110) were recognised
under the ESOS scheme in 2018-19. 2 penalties
totalling £565 were recognised under the CCA
scheme for the first time in 2018-19.

Trust Statement
243
3 Expenditure and
disbursements
3.1
Costs incurred in the collection of
receipts
2018-19
2017-18
£’000
£’000
Foreign currency
translation costs
(EU ETS)
1,248
424
Interest charges on
Euro auction bank
account (EU ETS)
21
8
Total
1,269
432
3.2
Credit losses
2018-19
2017-18
£’000
£’000
De-recognition due to
successful appeal – EU
ETS Penalties
-
969
De-recognition of
CRC penalty
-
3
Total
-
972
No penalties were appealed in 2018-19, with
just 2 EU ETS penalties successfully appealed
and written back in 2017-18. No disbursements
are now paid out via the BEIS Trust Statement.
However, the Department incurred expenditure of
£668,113 (2017-18: £606,340) in administering EU
ETS and £368,211 (2017-18: £430,037) in respect
of the CRC Scheme. Expenditure to administer
the CCA scheme totalled £357,643 (2017-18:
£363,124). Expenditure incurred administering the
ESOS scheme in 2018-19 amount to £915,405
(2017-18: £1,190,555). Expenditures on EU
ETS, ESOS, CRC and CCA are included in the
Department’s Accounts because there is no
express statutory provision for these costs to be
deducted from the revenue collected and paid
over to the Consolidated Fund.
4 Receivables and accrued
fees
2018-19
2017-18
£’000
£’000
Civil Penalties
receivable
2,797
1,471
Total
2,797
1,471
Civil penalties receivable represent the amounts
due from the participants where invoices for
payment have been issued but not paid for at
the year end.
5 Cash and cash
equivalents
2018-19
2017-18
£’000
£’000
Balance as at 1 April
23,921
17,087
Net change in
cash and cash
equivalent balances
3,977
6,834
Balance at 31 March
27,898
23,921
The following balances at 31 March were held at:
Government
Banking Service
27,898
23,921
Total
27,898
23,921
6 Payables
2018-19
2017-18
£’000
£’000
Other
324
404
Total
324
404

Annual report and accounts 2018-19
244
7 Balance on the
Consolidated Fund
accounts
2018-19
2017-18
£’000
£’000
Balance on the
consolidated Fund as
at 1 April
24,988
19,022
Net revenue for the
Consolidated Fund
1,712,741
1,174,538
Less amounts paid to
the Consolidated Fund
(1,707,358)
(1,168,572)
Balance on the
Consolidated Fund
as at 31 March
30,371
24,988
8 Financial instruments
8.1
Classification and categorisation of
financial instruments
Note
2018-19
2017-18
£’000
£’000
Financial assets
Cash
5
27,898
23,921
Civil penalties
receivable
4
2,797
1,471
Total
financial assets
30,695
25,392
Financial liabilities
Other Payables
6
(324)
(404)
Total financial
liabilities
(324)
(404)
8.2
Risk exposure to financial instruments
EU Emissions Trading Scheme
The EU Emissions Trading Scheme is exposed
to foreign currency risk due to the timing
difference in recognising the proceeds at the
auction exchange rate and the date at which the
proceeds are converted into Sterling, which is
one day after the close of the auction; this results
in either an exchange loss or gain. As shown in
note 3.1 there was an exchange loss incurred this
financial year of £1,248,000 (2017-18: £424,000).
The scheme is not exposed to interest rate or
liquidity risk and its exposure to market risk is
limited due to there being a current demand for
carbon allowances.
The civil penalties imposed under the EU ETS
scheme are subject to credit risk, but this risk
is assessed by management as minimal due
to the nature of the participants in the scheme.
However, no penalties were written back in 2018-
19. 2 aviation civil penalties were written off in
2017-18 (note 3.2) as the companies successfully
appealed the penalties.
CRC Scheme
The allowance sales under the Carbon Reduction
Commitment are subject to credit risk, but this
risk is assessed by management as low. This is
borne out in the results from previous years of
the scheme. The civil penalties imposed under
the CRC scheme are subject to credit risk,
but this risk is assessed by management as
minimal due to the nature of the participants in
the scheme.
CCA Scheme
The buy-out payment revenue collected under
the CCA scheme is subject to credit risk, but
this risk is assessed by management as low,
due to the nature of participants in the scheme.
All fees under the regime are received in sterling
minimising any other risks.
Information which will allow Trust Statement
users to evaluate the significance of financial
instruments on the Department’s financial
performance and position and the nature and
extent of the Department’s exposure to other
risks arising from financial instruments can be
found in note 23 to the Department’s Accounts
9 Contingent liability
A contingent liability exists for refunds the
Department may have to pay to participants
in the CRC Energy Efficiency Scheme who
have over-surrendered allowances. This is as a
result of legislation included in the CRC Order
2013, which came into force in May 2013. The
refunds are contingent upon participants being
able to prove that the over- surrender was due
to a reporting error and must be agreed by the
Secretary of State.
The Department is unable to quantify the
amount of future refunds, but based on the most
recent information available from the scheme
administrators, the refunds are not expected
to be significant. Future refunds will be paid as
and when they fall due out of future scheme
receipts. The Department has issued guidance to
participants detailing the refund process.

Trust Statement
245
Furthermore, for the CCA scheme a contingent
liability also exists in the secondary reporting
phase of each Target Reporting Period. This
is where a participant has undergone review
or audit procedures and it is deemed they
have overpaid. Thus, the participant is due a
refund. The Department must retain sufficient
funds in order to satisfy this requirement of the
CCA scheme.
10 Events after the reporting
period
There were no significant events after the
reporting period that require disclosure.
The Accounting Officer has duly authorised
the issue of the Trust Statement on the date
of the Comptroller and Auditor General’s audit
certificate.

Annual report and accounts 2018-19
246
Annex D: Annexes to the Trust
Statement
Accounts Direction given by HM Treasury in
accordance with section 2 of the Exchequer
and Audit Departments Act 1921
1. This direction applies to those government
departments listed in appendix 2.
2. The Department shall prepare a Trust
Statement (“the Statement”) for the financial
year ended 31 March 2019 for the revenue
and other income, as directed by the
Treasury, collected by the Department as
an agent for others, in compliance with
the accounting principles and disclosure
requirements of the edition of the Government
Financial Reporting Manual by HM Treasury
(“FReM”) which is in force for 2018-19.
3. The Statement shall be prepared, as
prescribed in appendix 1, so as to give a true
and fair view of (a) the state of affairs relating
to the collection and allocation of taxes,
licence fees, fines and penalties and other
income by the Department as agent and of
the expenses incurred in the collection of
those taxes, licence fees, fines and penalties
insofar as they can properly be met from that
revenue and other income; (b) the revenue
and expenditure; and (c) the cash flows for
the year then ended.
4. The Statement shall also be prepared so
as to provide disclosure of any material
expenditure or income that has not been
applied to the purposes intended by
Parliament or material transactions that
have not conformed to the authorities which
govern them.
5. When preparing the Statement, the
Department shall comply with the
guidance given in the FReM (Chapter 8).
The Department shall also agree with
HM Treasury the format of the Principal
Accounting Officer’s Foreword to the
Statement, and the supporting notes, and
the accounting policies to be adopted,
particularly in relation to revenue recognition.
Regard shall also be given to all relevant
accounting and disclosure requirements in
Managing Public Money and other guidance
issued by HM Treasury, and to the principles
underlying International Financial Reporting
Standards.
6. Compliance with the requirements of
the FReM will, in all but exceptional
circumstances, be necessary for the
accounts to give a true and fair view. If, in
these exceptional circumstances, compliance
with the requirements of the FReM is
inconsistent with the requirement to give
a true and fair view, the requirements of
the FReM should be departed from only to
the extent necessary to give a true and fair
view. In such cases, informed and unbiased
judgement should be used to devise an
appropriate alternative treatment which
should be consistent with both the economic
characteristics of the circumstances
concerned and the spirit of the FReM. Any
material departure from the FReM should
be discussed in the first instance with
HM Treasury.
7. The Statement shall be transmitted to the
Comptroller and Auditor General for the
purpose of his examination and report by
a date agreed with the Comptroller and
Auditor General and HM Treasury to enable
compliance with the administrative deadline
for laying the audited accounts before
Parliament before the Summer Recess.
8. The Trust Statement, together with this
direction (but with the exception of the related
appendices) and the Report produced
by the Comptroller and Auditor General
under section 2 of the Exchequer and
Audit Departments Act 1921 shall be laid
before Parliament at the same time as the
Department’s Resource Accounts for the
year unless the Treasury have agreed that the
Trust Statement may be laid at a later date.
Vicky Rock
Interim Director,
Government Financial Reporting
HM Treasury

Trust Statement
247
Appendix 1 to Annex D
Trust Statement for the year ended
31 March 2019
1. The Trust Statement shall include:
• a Foreword by the Principal
Accounting Officer
• a Statement of the Principal Accounting
Officer’s Responsibilities
• a Governance Statement
• a Statement of Revenue, Other Income and
Expenditure
• a Statement of Financial Position
• a Cash Flow Statement
• such notes as may be necessary to
present a true and fair view
2. The notes shall include among other items:
• the accounting policies, including the policy
for revenue recognition and estimation
techniques and forecasting techniques
together with statements explaining
any significant uncertainty surrounding
estimates and forecasts
• a breakdown of material items within
the accounts
• any assets, including intangible assets and
contingent liabilities
• summaries of losses, write-offs and
remissions
• post balance sheet events
• any other notes agreed with HM Treasury
and the National Audit Office
Appendix 2 to Annex D
Application of the accounts direction
Sponsoring
Department
Income
Stream
Responsible
Entity
Department
for Business,
Energy and
Industrial Strategy
EU Emissions
Allowance
BEIS
Fines
and Penalties
BEIS
CRC
Allowances
BEIS
Climate Change
Agreements
BEIS

Annexes
The Construction Sector Deal - a partnership between the
industry and government - aims to transform the sector’s
productivity via innovative technologies and a more highly
skilled workforce.

Annexes
249
Annex A: Common core tables
Table 1 – Public spending
This table provides a summary of departmental net expenditure using the same headings as voted within the Estimate.
2014-15
Outturn
2015-16
Outturn
2016-17
Outturn
2017-18
Outturn
2018-19
Outturn
2019-20
Plans
£000
£000
£000
£000
£000
£000
Resource DEL
Deliver an ambitious industrial strategy
286,154
433,415
419,912
377,129
182,286
161,508
Maximise investment opportunities and bolster
UK interests
3,980
19,368
25,651
40,218
70,705
65,000
Promote competitive markets and responsible
business practices
71,654
71,310
78,724
85,923
94,443
139,461
Delivering affordable energy for households and
businesses
355,160
342,329
36,365
32,381
44,155
55,139
Ensuring that our energy system is reliable
and secure
18,822
11,560
5,823
4,201
4,756
13,090
Taking action on climate change and decarbonisation
115,824
95,211
27,236
91,076
24,829
39,417
Managing our energy legacy safely
and responsibly
318,312
306,343
291,203
265,752
251,870
230,630
Science and Research
10,819
13,540
(1,985)
5,088
4,608
250
Capability
408,745
361,322
307,082
320,301
393,848
513,313
Government as Shareholder
241,890
200,008
151,208
113,207
62,819
102,805
Deliver an ambitious industrial strategy (ALB) net
-
-
5,433
15,172
15,147
-
Promote competitive markets and responsible business
practices (ALB) net
49,766
49,295
48,127
51,648
54,635
54,912
Ensuring that our energy system is reliable and
secure (ALB) net
(280)
674
1,707
(1,628)
(2,667)
1
Taking action on climate change and
decarbonisation (ALB) net
4,416
4,894
2,399
4,834
6,069
4,473
Managing our energy legacy safely and
responsibly (ALB) net
23,188
46,977
39,234
34,711
32,075
23,857
Science and Research (ALB) net
41,696
88,406
257,413
234,283
276,226
284,022
Capability (ALB) Net
59,268
39,218
39,818
33,635
30,475
-
Government as Shareholder (ALB) net
16,238
(30,023)
(34,034)
(73,072)
(19,479)
(32,828)
NDA and SLC expenditure
1,431,342
1,414,542
1,287,445
1,254,752
1,175,337
1,516,279

Annual report and accounts 2018–19
250
2014-15
Outturn
2015-16
Outturn
2016-17
Outturn
2017-18
Outturn
2018-19
Outturn
2019-20
Plans
£000
£000
£000
£000
£000
£000
Nuclear Decommissioning Authority Income (CFER)
(1,008,787)
(974,558)
(1,026,768)
(1,176,795)
(978,373)
(1,060,000)
Nuclear Safeguards Development
-
-
-
1,189
(2,275)
-
Managing our energy legacy safely and responsibly (CFER)
-
-
-
-
(475,000)
-
Total Resource DEL
2,448,207
2,493,831
1,961,993
1,714,005
1,246,489
2,111,329
Of which:
Staff costs
518,385
548,832
519,570
533,290
605,821
*
Purchase of goods and services
2,198,703
2,111,285
1,977,969
1,938,532
1,936,980
*
Income from sales of goods and services
(1,157,876)
(1,144,381)
(1,172,788)
(1,079,179)
(996,751)
(1,107,885)
Current grants to local government (net)
18,354
25,513
12,055
9,587
22,388
23,980
Current grants to persons and non-profit bodies (net)
585,126
548,517
178,351
135,838
133,554
122,046
Current grants abroad (net)
31,427
41,307
58,511
59,465
72,274
91,194
Subsidies to private sector companies
-
246,476
274,038
526,638
141,423
124,000
Subsidies to public corporations
230,402
183,035
145,239
95,170
61,530
50,000
Net public service pensions2
(7)
-
-
(9)
(12)
-
Rentals
(63,400)
(47,642)
40,608
49,177
37,077
36,715
Depreciation1
293,609
268,978
355,397
266,467
310,652
322,469
Take up of provisions
23
(30)
780
(165)
-
-
Change in pension scheme liabilities
12
35
128
1,372
547
170
Other resource
(206,551)
(288,094)
(427,865)
(822,178)
(1,078,994)
(174,656)
Resource AME
Deliver an ambitious industrial strategy
(93,804)
(7,428)
215,413
17,448
(312,599)
(74,565)
Maximise investment opportunities and bolster
UK interests
3,881
(457)
1,844
1,586
6,044
-
Promote competitive markets and responsible
business practices
74,000
102,008
133,000
7,000
79,000
150,000
Ensuring that our energy system is reliable and secure
342,599
(309,667)
(3,204)
(415)
(295)
(27)
Taking action on climate change and decarbonisation
497,618
841,397
(1,337,205)
-
-
-

Annexes
251
2014-15
Outturn
2015-16
Outturn
2016-17
Outturn
2017-18
Outturn
2018-19
Outturn
2019-20
Plans
£000
£000
£000
£000
£000
£000
Managing our energy legacy safely and responsibly
(96,723)
(308,924)
(258,615)
(885,264)
(297,497)
(148,565)
Science and Research
87,581
49,871
41,888
45,578
205,985
101,333
Capability
(29,793)
(21,783)
(6,012)
13,557
(12,990)
(26,252)
Government as Shareholder
25,524
(60,526)
(12,313)
(73,714)
1,035
40,845
Renewable Heat Incentive
158,946
372,420
545,426
687,275
817,898
1,010,000
Deliver an ambitious industrial strategy (ALB) net
(4,159)
7,741
(10,853)
4,962
(21,100)
(6,000)
Promote competitive markets and responsible business
practices (ALB) net
(243)
(161)
(59)
87
57
181
Taking action on climate change and
decarbonisation (ALB) net
1,987,931
9,281,975
1,065,496
3,558,227
(2,971,284)
-
Managing our energy legacy safely and
responsibly (ALB) net
(65,835)
1,906,630
2,025
1,507,140
(2,022,249)
(86,198)
Science and Research (ALB) net
48,830
107,287
91,411
94,536
41,299
9,182
Capability (ALB) Net
-
2
(400)
-
1
-
Government as Shareholder (ALB) net
(148,034)
(56,337)
(26,653)
(25,628)
93,768
36,796
Nuclear Decommissioning Authority
5,644,353
89,797,932
2,850,516
69,911,856
(101,791,292)
1,620,000
Government as Shareholder
239,776
254,256
231,511
259,815
319,330
328,000
Total Resource AME
8,672,448
101,956,236
3,523,216
75,124,046
(105,864,889)
2,954,730
Of which:
Staff costs
-
-
-
-
4,404
*
Purchase of goods and services
19,776
23,450
36,665
101,425
145,292
*
Income from sales of goods and services
(152)
-
-
-
(3)
-
Current grants to persons and non-profit bodies (net)
392,622
429,826
429,011
353,221
416,439
621,900
Subsidies to private sector companies
158,943
372,420
545,426
687,275
817,898
1,010,000
Rentals
(139)
(81)
(718)
(2,456)
(2,198)
-
Depreciation1
2,653,848
10,126,954
59,847
4,397,424
(1,962,038)
82,863
Take up of provisions
6,022,459
91,967,474
2,984,041
71,236,030
(101,359,925)
1,703,913
Release of provision
(407,513)
(692,733)
(352,371)
(316,703)
(3,078,344)
(327,188)
Change in pension scheme liabilities
29,627
19,199
20,375
34,554
29,717
-

Annual report and accounts 2018–19
252
2014-15
Outturn
2015-16
Outturn
2016-17
Outturn
2017-18
Outturn
2018-19
Outturn
2019-20
Plans
£000
£000
£000
£000
£000
£000
Unwinding of the discount rate on pension
scheme liabilities
43,398
37,423
38,095
36,924
37,782
80
Other resource
(240,421)
(327,696)
(237,155)
(1,403,648)
(913,900)
(139,311)
Total Resource Budget
11,120,655
104,450,067
5,485,209
76,838,051
(104,618,400)
5,066,059
Of which:
Depreciation1
2,947,457
10,395,932
415,244
4,663,891
(1,651,386)
405,332
Capital DEL
Deliver an ambitious industrial strategy
(345,273)
289,783
298,132
142,364
(54,606)
98,816
Maximise investment opportunities and bolster
UK interests
190,635
319,887
303,527
289,791
243,957
270,000
Promote competitive markets and responsible
business practices
47
(12,700)
376
2,375
2,682
5,389
Delivering affordable energy for households and
businesses
137,266
131,102
42,201
43,633
32,718
58,009
Ensuring that our energy system is reliable and secure
1,158
5,071
(548)
60
(626)
130
Taking action on climate change and decarbonisation
47,620
54,871
39,569
51,578
73,121
278,862
Managing our energy legacy safely and responsibly
7,103
5,017
7,747
7,944
4,278
-
Science and Research
521,482
442,991
2,596,657
2,634,812
563,177
976,108
Capability
11,027
11,929
10,181
18,777
30,305
244,438
Government as Shareholder
106,569
227,462
8,535
(96,042)
175,871
(88,839)
Deliver an ambitious industrial strategy (ALB) net
-
-
5
32
-
-
Promote competitive markets and responsible business
practices (ALB) net
1,559
940
1,027
1,377
1,059
1,160
Ensuring that our energy system is reliable and
secure (ALB) net
2,207
975
1,005
-
-
-
Taking action on climate change and
decarbonisation (ALB) net
4,004
959
601
39
255
99
Managing our energy legacy safely and
responsibly (ALB) net
5,895
12,243
8,778
13,559
9,503
14,650

Annexes
253
2014-15
Outturn
2015-16
Outturn
2016-17
Outturn
2017-18
Outturn
2018-19
Outturn
2019-20
Plans
£000
£000
£000
£000
£000
£000
Science and Research (ALB) net
6,133,277
6,260,785
4,257,684
4,761,522
7,530,042
7,707,822
Capability (ALB) Net
773
641
480
43
2,482
-
Government as Shareholder (ALB) net
616,035
595,189
1,172,665
469,043
197,015
139,019
NDA and SLC expenditure
1,845,932
1,827,695
1,970,695
2,051,013
2,002,699
1,755,000
Nuclear Decommissioning Authority Income (CFER)
(2,916)
(51,639)
-
-
-
-
Total Capital DEL
9,284,400
10,123,201
10,719,317
10,391,920
10,813,932
11,460,663
Of which:
Staff costs
499,321
480,039
477,555
480,982
502,376
*
Purchase of goods and services
529,348
572,620
400,772
498,431
833,595
*
Income from sales of goods and services
(122,637)
(131,102)
(258,776)
(276,222)
(260,137)
(23,070)
Current grants to persons and non-profit bodies (net)
4,465,923
4,666,325
3,098,274
3,582,865
5,744,797
6,810,013
Current grants abroad (net)
317,714
302,460
317,400
330,130
340,794
158,240
Subsidies to public corporations
(1,238)
(2,655)
151,078
98,737
-
60
Capital support for local government (net)
21,570
54,528
42,270
41,473
5,826
57,500
Capital grants to persons & non-profit bodies (net)
968,596
999,113
424,678
482,446
888,564
1,104,893
Capital grants to private sector companies (net)
131,354
155,115
239,455
21,138
32,893
167,213
Capital grants abroad (net)
203,769
425,981
525,993
483,289
308,624
282,254
Capital support for public corporations
90,278
170,203
147,126
81,835
204,229
92,290
Purchase of assets
2,071,328
2,059,177
2,242,318
2,412,651
2,345,321
1,996,601
Income from sales of assets
(37,628)
(92,106)
(65,827)
(142,274)
(23,144)
-
Net lending to the private sector and abroad
519,050
630,964
1,069,550
253,812
22,276
326,171
Other capital
(372,348)
(167,461)
1,907,451
2,042,627
(132,082)
(22,449)
Capital AME
Deliver an ambitious industrial strategy
(35,000)
-
-
-
-
-
Maximise investment opportunities and bolster
UK interests
17,413
2,310
-
-
-
-
Managing our energy legacy safely and responsibly
(620,294)
61,891
(38,273)
611,792
35,412
5,471
Science and Research
-
-
834
864
1,212
-

Annual report and accounts 2018–19
254
2014-15
Outturn
2015-16
Outturn
2016-17
Outturn
2017-18
Outturn
2018-19
Outturn
2019-20
Plans
£000
£000
£000
£000
£000
£000
Government as Shareholder
291,559
210,202
129,181
(1,909)
(120,000)
-
Renewable Heat Incentive
1,697
(22)
-
-
-
-
Deliver an ambitious industrial strategy (ALB) net
7,159
17,299
84,842
(3,474)
(16,387)
35,000
Science and Research (ALB) net
(71,497)
(55,972)
(61,156)
(63,845)
(59,692)
-
Government as Shareholder (ALB) net
(1,206,678)
(430,678)
(129,935)
(119,122)
(115,399)
(77,070)
Managing our energy legacy safely and responsibly (CFER)
-
-
-
-
(141,811)
(142,400)
Government as Shareholder
-
-
-
(1,621,078)
-
-
Government as Shareholder (ALB) net
-
(1,434,995)
-
-
-
-
Total Capital AME
(1,615,641)
(1,629,965)
(14,507)
(1,196,772)
(416,665)
(178,999)
Of which:
Staff costs
(25,110)
(16,992)
(18,461)
(18,719)
(15,325)
*
Purchase of goods and services
-
-
834
(7,325)
(2,330)
*
Capital grants to persons & non-profit bodies (net)
1,697
(22)
-
-
-
-
Capital grants to private sector companies (net)
(500,441)
(12,798)
(4,819)
(184,787)
-
-
Capital grants abroad (net)
17,413
2,310
-
-
-
-
Capital support for public corporations
292,000
53,248
134,000
36,000
(120,000)
-
Purchase of assets
79
350
54,158
318
-
-
Income from sales of assets
(264,404)
(32,150)
15
-
-
-
Net lending to the private sector and abroad
(1,070,518)
(1,753,009)
(141,781)
(1,638,862)
(273,597)
(184,470)
Other capital
(66,357)
129,098
(38,453)
616,603
(5,413)
5,471
Total Capital Budget
7,668,759
8,493,236
10,704,810
9,195,148
10,397,267
11,281,664
Total departmental spending3
15,841,957
102,547,371
15,774,775
81,369,308
(92,569,747)
15,942,391
Of which:
Total DEL
11,438,998
12,348,054
12,325,913
11,839,458
11,749,769
13,249,523
Total AME
4,402,959
90,199,317
3,448,862
69,529,850
(104,319,516)
2,692,868
1 Includes impairments
2 Pension schemes report under FRS 17 accounting requirements. These figures therefore include cash payments made and contributions
received, as well as certain non-cash items.

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255
3 Total departmental spending is the sum of the resource budget and the capital budget less
depreciation. Similarly, total DEL is the sum of the resource budget DEL and capital budget DEL less
depreciation in DEL, and total AME is the sum of resource budget AME and capital budget AME
less depreciation in AME.
* Figures for Plans for staff costs and purchase of goods and services, which include assumptions on
future price and pay movements, are redacted in line with HMT guidance.

Annual report and accounts 2018–19
256
Notes:
The large increase in spend in 2014-15 and 2015-16 on Delivering affordable energy for households and businesses
Resource DEL is due to the Government Electricity Rebate.
Resource DEL expenditure for Nuclear Safeguards Development is shown separately in 2017-18 as this expenditure was
funded through a Contingencies Fund advance, pending passage of the Nuclear Safeguards Bill through Parliament.
Repayment of that advance in 2018-19 was made against Capability DEL, offset by the credit shown against Nuclear
Safeguards Development.
The receipt in 2018-19 against Managing our energy legacy safely and responsibly (CFER) Resource DEL relates to income
from coal pension scheme surpluses.
The increase in spend in 2016-17 and 2017-18 against Science and Research Capital DEL and decrease against Science
and Research (ALB) Capital DEL reflects the reclassification of expenditure for the Higher Education Funding Council for
England (HEFCE) for Science and Research following the Machinery of Government transfer of HEFCE to the Department
for Education. With effect from 2018-19 this expenditure falls under Research England as part of UKRI, under Science and
Research (ALB).
The figures for Depreciation in Resource AME include the movement in fair value for Contracts for Difference,
shown against Taking action on climate change and decarbonisation and Taking action on climate change and
decarbonisation (ALB).
The large movements in take up of provisions within Resource AME in 2015-16, 2017-18 and 2018-19 is due to movements
in the long term discount rate for provisions. This largely impacts the lines for Nuclear Decommissioning Authority and
Managing our energy legacy safely and responsibly (ALB).
The receipt in 2017-18 against Government as Shareholder (CFER) Capital AME reflects the proceeds from the sale of the
Green Investment Bank.
In their role as administrator of the Government’s GB Renewable Heat Incentive scheme, Ofgem made payments to
scheme participants totalling £817,898,169 in the financial year 2018-19. Based on Ofgem’s sampling of the population
and subject to our detailed assumptions, we can be 95% confident that the estimated value of error for GB Renewable
Heat Incentive scheme payments made or accrued in the financial year 2018-19 is between the upper and lower limits
of £21,765,747 and £43,175,637. Based on the same assumptions, the most likely estimated value of error for the same
period is £32,470,692. This is less than 4 per cent of scheme spend in 2018-19.

Annexes
257
Table 2 - Administration Budget
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
Outturn
Outturn
Outturn
Outturn
Outturn
Plans
£’000
£’000
£’000
£’000
£’000
£’000
Resource DEL
Deliver an ambitious industrial strategy
1,935
583
-
-
-
-
Promote competitive markets and
responsible business practices
796
818
827
814
798
864
Managing our energy legacy safely and
responsibly
-
-
(3,801)
-
-
-
Science and Research
58
59
-
2
-
-
Capability
345,965
327,944
288,546
280,222
350,166
441,124
Government as Shareholder
3,108
3,885
4,299
3,876
3,882
5,562
Promote competitive markets and
responsible business practices (ALB) net
10,102
8,630
7,362
8,735
8,783
8,539
Taking action on climate change and
decarbonisation (ALB) net
4,043
3,752
3,535
3,447
3,353
4,472
Managing our energy legacy safely and
responsibly (ALB) net
5,536
10,191
12,104
7,044
6,912
4,703
Science and Research (ALB) net
7,305
4,685
986
3,371
5,547
3,722
Capability (ALB) Net
59,268
39,218
39,818
33,635
30,475
-
Government as Shareholder (ALB) net
267
251
162
27
52
-
NDA and SLC expenditure
37,110
34,992
38,195
42,121
50,612
55,869
Total Administration Budget
475,493
435,008
392,033
383,294
460,580
524,855
Of which:
Staff costs
341,753
365,590
329,069
326,207
385,642
*
Purchase of goods and services
179,482
145,800
159,274
154,657
177,278
*
Income from sales of goods
and services
(123,790)
(135,538)
(37,585)
(31,151)
(10,220)
(39,795)
Current grants to persons and non-
profit bodies (net)
30
29
38
493
425
91
Current grants abroad (net)
18
108
106
170
184
-
Subsidies to private sector companies
-
-
-
9
-
-
Subsidies to public corporations
-
-
-
-
28
-
Net public service pensions
(7)
-
-
(9)
(12)
-
Rentals
27,074
31,852
30,117
34,299
22,485
23,853
Depreciation
30,738
29,956
27,034
22,901
18,850
34,754
Take up of provisions
(12)
2
-
(50)
-
-
Change in pension scheme liabilities
(65)
25
106
184
141
-
Other resource
20,272
(2,816)
(116,126)
(124,416)
(134,221)
(11,158)
* Figures for Plans for staff costs and purchase of goods and services, which include assumptions on
future price and pay movements, are redacted in line with HMT guidance.

Annual report and accounts 2018–19
258
Annex B: Glossary
ACAS: Advisory, Conciliation and
Arbitration Service
AFS: Available for Sale
AHRC: Arts and Humanities Research Council
AI: Artificial intelligence
ALB: Arm’s-length Bodies
AME: Annual Managed Expenditure
ARAC: Audit and Risk Assurance Committee
BAES: BAE Systems
BBB: British Business Bank Plc
BBIL: British Business Investments Ltd
BBSRC: Biotechnology and Biological Sciences
Research Council
BEIS: Department for Business, Energy and
Industrial Strategy
BFP: Business Finance Partnership
BIS: Department for Business, Innovation and
Skills, one of our predecessor departments
BNFL: British Nuclear Fuels Ltd
BVCA: British Venture Capital Association
CAT: Competition Appeal Tribunal
CAV: Connected Autonomous Vehicles
CCA: Climate Change Agreements
CCC: Committee on Climate Change
CCL: Climate Change Level
CCUS: International Carbon, Capture
and Storage
CEO: Chief Executive Officer
CERN: European Organisation for
Nuclear Research
CETV: Cash Equivalent Transfer Value
CfD: Contracts for Difference
CFP: Committee on Fuel Poverty
CNPA: Civil Nuclear Police Authority
CNPP: Civil Nuclear Pension Plan
CRC: Carbon Reduction Commitment
CSOPS: Civil Servant and Other
Pension Scheme
DDM: Dynamic Dispatch Model
DECC: Department for Energy and Climate
Change, one of our predecessor departments
Defra: Department for Food, Environment and
Rural Affairs
DEL: Departmental Expenditure Limit
DfE: Department of Education
ECF: Enterprise Capital Fund
ECL: Expected Credit Loss
EDFE: EDF Energy Nuclear Generation Limited
EFG: Enterprise Financial Guarantee
EHL: Enrichment Holdings Limited
EII: Energy Intensive Industries
EMR: Electricity Market Reform
EPSRC: Economic and Physical Sciences
Research Council
ERDF: European Regional Development Fund
ESA: European Space Agency
ESC: Electricity Settlements Company
ESO: European Southern Observatory
ESOS: Energy Savings Opportunity Scheme
ESRC: Economic and Social Research Council
EUA: European Union Allowance
EUAA: European Union Aviation Allowance
EU ETS: EU Emissions Trading Scheme
EUV: Existing-use Value
ExCo: Executive Committee
FDP: Funded Decommissioning Programme
FIDeR: Financial Investment Decision Enabling
for Renewables
FLS: Future Leaders Scheme
FRC: Financial Reporting Council
FReM: Government Financial Reporting Manual
FVOCI: Fair Value through Other
Comprehensive Income
FVPTL: Fair Value for Profit and Loss
GCRF: Global Challenges Research Fund
GDF: Geological Disposal Facility
GDPR: General Data Protection Regulation
GGC: Greening Government Commitments
GHG: Greenhouse Gas
GIAA: Government Internal Audit Agency
GIB: Green Investment Bank Ltd

Annexes
259
GMPP: Government Major Projects Portfolio
GPA: Government Property Agency
GRAA: Greenhouse Resources and
Accounts Act
HEFCE: Higher Education Funding Council
for England
HMRC: HM Revenue and Customs
HMT: HM Treasury
HNIP: Heat Networks Investment Project
HPC: Hinkley Point C
IAEA: International Atomic Energy Agency
IDB: Inter-American Development Bank
IDP: Individual Development Programme
IAS: International Accounting Standards
IFRS: International Financial
Reporting Standards
INSS: Insolvency Service
IPCC: Inter-Governmental Panel on
Climate Change
IRR: Internal Rate of Return
ISCF: Industrial Strategy Challenge Fund
ITER: International Thermonuclear
Experimental Reactor
IUK: Innovate UK (Technology Strategy Board)
JET: Joint European Torus
JPA: Joint Procurement Agency
LCCC: Low Carbon Contracts Company Ltd
LEP: Local Enterprise Partnerships
LLC: Local Land Charges
LTP: Life Time Plan
MDG: Millennium Development Goals
MEIL: Midlands Engine Investment Ltd
MHCLG: Ministry of Housing, Communities and
Local Government
MRC: Medical Research Council
MRCPS: Medical Research Council
Pension Scheme
NAO: National Audit Office
NDA: Nuclear Decommissioning Authority
NDC: Nationally Determined Contributions
NDPB: Non-Departmental Public Bodies
NERC: Natural Environment Research Council
NESTA: National Endowment for Science,
Technology and the Arts
NFL: Nuclear Liabilities Fund
NGC: Nominations and Governance Committee
NIF: National Insurance Fund
NMDF: National Battery Manufacturing
Development Facility
NNHL: National Nuclear Holdings Ltd
NPIL: Northern Powerhouse Investment Ltd
NPLML: NPL Management Ltd
OCI: Other Comprehensive Income
ODA: Official Development Assistance
Ofgem: Office of Gas and Electricity Markets
OGA: Oil and Gas Authority
ONS: Office for National Statistics
OPRED: Offshore Petroleum Regulator for
Environment and Decommissioning
OSL: Ordnance Survey Limited
PBL: Parliamentary Business and
Legislation Committee
PBO: Parent Body Organisation
PCFP: Parliamentary Contributory Pension Fund
PCSPS: Principal Civil Service Pension Scheme
PDC: Public Dividend Capital
PES: Public Expenditure System
PEVC: International Private Equity and
Venture Capital
PFR: Performance Finance and Risk Committee
PSH: Postal Services Holding Company Ltd
PIC: Projects and Investment Committee
PNC: Police National Computer
PO: Partner Organisations
POpCo: People and Operations Committee
POL: Post Office Ltd
PPE: Property, Plant and Equipment
PV: Present Value
QA: Quality Assurance

Annual report and accounts 2018–19
260
R&D: Research and Development
RMPP: Royal Mail Pension Plan
RPC: Regulatory Policy Committee
RPS: Redundancy Payment Services
RSRL: Research Sites Restoration Limited
RWM: Committee on Radioactive Waste
Management
SCS: Senior Civil Service
SDG: Sustainable Development Goals
SDP: Single Departmental Plan
SFLG: Small Firms Loan Guarantee Scheme
SI: Statutory Instrument
SLC: Site Licence Company
SLS: Senior Leaders Scheme
SME: Small and Medium sized Enterprise
SoCNE: Statement of Comprehensive Net
Expenditure
SoFP: Statement of Financial Position
SoPS: Statement of Parliamentary Supply
SOSIA: Secretary of State Investor Agreement
SPRC: Strategic Policy Review Committee
SRMC: Short Run Marginal Cost
STFC: Science and Technology Facilities
Research Council
STSC: South Tees Site Company Ltd
SULCO: Start Up Loans Company
TCD: Target Commissioning Date
TCW: Target Commissioning Window
TLM: Transmission Loss Multiplier
TME: Total Managed Expenditure
UKAEA: UK Atomic Energy Authority
UKGIP: UK Green Infrastructure Platform Ltd
UKIIF: UK Innovation Investment Fund
UKRI: UK Research and Innovation
UKSA: UK Space Agency
UKSBS: UK Shared Business Services Ltd
VAT: Value Added Tax
WTC: Waste Transfer Contract