Document

NORTHWEST DEVELOPMENT AGENCY

ANNUAL REPORT AND FINANCIAL STATEMENTS

1sTAPRIL 2002 TO 31sT MARCH 2003

CONTENTS

Page

FOREWORD BY BRYAN GRAY, CHAIRMAN

STATE OF THE REGION

2

3

SUMMARY OF PERFORMANCE AND EXPENDITURE 4

REVIEW OF THE YEAR BY CHIEF EXECUTIVE, MIKE SHIELDS

KEY ACHIEVEMENTS 2002/03

5

6

PARTNERSHIP WORKING

NWDA GOVERNANCE

13

14

APPENDICES

ENVIRONMENTAL AUDIT 17

SOCIAL INCLUSION AUDIT 21

FINANCIAL STATEMENTS 23

The Northwest Development Agency

The Northwest Development Agency is a Non - Departmental Public Body (NDPB) sponsored by theDepartment of Trade and Industry. It was established under the Regional Development Agencies Act 1998 witha statutory remit to further the sustainable economic development and regeneration of the Northwest regionthrough the promotion of business competitiveness, efficiency, investment, employment and skillsdevelopment.

The Agency's role is twofold:

· To co-ordinate the delivery of the Regional Economic Strategy, in conjunction with the North West RegionalAssembly and Government Office for the North West.

· To use Agency budgets to directly tackle RES priorities, lever in resources from elsewhere for the samepurpose and provide funding support to partners in pursuit of Regional Strategy objectives.

2

CHAIRMAN'S FOREWORD

My appointment as Chairman of the Northwest's Regional Development Agency coincided with the requirementto produce a new Regional Economic Strategy. This presented a wonderful opportunity to consider the needsof the region while recognising that we must be very focused if we are to make a lasting impression on theregional economy.

After extensive consultation, the Regional Economic Strategy (RES) was launched in March 2003. I was veryimpressed by the contributions made by so many people. I was also pleased that we were able to summariseour vision in a concise way:

"To transform England's Norlhwest through sustainable economic development."

The RES focuses on five priorities:

1. Business2. Regeneration3. Skills and Employment4. Infrastructure5. Image

Everything that we do will now be tested against the context provided by the RES.

Within this annual report you will find details of all the activities in which the RDA was involved during the year.I would like to highlight a small number of issues which I think are particularly importànt.

Our economy will in the future depend more and more on our ability to use knowledge in an innovative and. enterprising way. This year we launched the North West Science Strategy which is helping to shape theregion's science base that is so fundamental to our future. We must ensure that appropriate skills are availablein the workplace and that everyone has the opportunity for lifelong learning. In November 2002 NWDA wasgiven the unique opportunity to run a Joint Pilot to transform business support linked to aduit learning. I believethis project has the opportunity to make a fundamental difference to our region.

Everyone recognises the importance of an efficient transport infrastructure to the regional economy. We havebegun work, together with the North West Regional Assembly, to produce an economically based regionaltransport vision. We are also developing strategies for Energyand Tourism.

The Transport Strategy is subsumed with the Regional Planning Guidance (RPG) which sets the broad spatialpriorities for the region in the context of formal statutory planning guidance. The revised Regional EconomicStrategy acknowledges RPG and the Action for Sustainability as key complementary regional frameworkdocuments. The Agency will continue to work closely with key partners to ensure that together these threedocuments provide the basis for the region's approach to sustainable development. .

An important part of our role is to respond to events which threaten the economic prosperity of the region. Wecontinue to respond to the problems caused by Foot and Mouth Disease and this year we responded to theannouncement of major job losses at Barrow by establishing a taskforce to ensure minimum economic impacton the area as well as determining action for long - term economic regeneration of the Furness peninsula.

I am pleased that increasingly it is recognised that the region has both the appetite and capability to manageit's own affairs within the context of national policies. We are pleased that the Government is passing moreresponsibility to the English regions and the RDA will continue to work with everyone in the North West toachieve our long - term vision.

Bryan M GrayChairman

3

STATE OF THE REGION

Introduction and Outlook

The Northwest has benefited from strong growth in tourism, leisure and consumer services, supported byconsumer confidence and renaissance of urban centres. However the economy of the Northwest is slowingdown reflecting developments in the global & UK economies. Consumer spending is forecast to slacken in2003, while a difficult trading environment hampers growth in exports and business investment. Manufacturingis facing further retrenchment in 2003, though the strong Euro should help to ease competitive pressures insome home and export markets. Public sector spending is expected to be a key driver of growth in theNorthwest.

GVA per head inthe Northwest is forecast to grow relative to the UK average in 2003 and 2004, thoughpredicted GDP growth rates are not expected to exceed 2% pa in 2003-5.

Output &'Orders

In 2002/03 the North West enjoyed strong growth in consumer demand and buoyant construction activity forthe Commonwealth Games and urban regeneration. However, the slow pick-up in the global economy,coupled with a strong £:€ exchange rate, posed particular problems for manufacturing industry in both homeand export markets. UK manufacturing output fell by 1% during 2002/03, 2.6% below 2001/02. In contrastconsumer spending grew by nearly 4% in 2002 and public sector current spending by 4.2%.

The year 2002/03 ended with a near standstilL. Growth in GDP slowed to 0.2% on the previous quarter whilemanufacturing output in the UK slipped 0.1 % to a level 0.8% below the first quarter of 2002. The latestbusiness surveys were conducted before or during the Iraq war, when uncertainty, the weak global outlook,and the hike in oil prices hit business confidence, particularly in the North West. Manufacturing output waswell below expectations; orders in home and export markets declined. As a result there was a sharp increasein the proportion of firms in the North West working below capacity. The service sector continued to showstrong .growth, with capacity utilisation at a five-year high, though growth in export sales halted and orderswere weaker.

Investment and Employment

The divergence between manufacturing and services is reflected in employment and investment trends. TheBCC survey showed employment in services rising every quarter, though slackening through the year.Recruitment for professional! managerial occupations has been particularly strong. The attrition inmanufacturing employment continues unabated, with prospects in the North West particularly poor at the endof 2002/03. Growth in public sector employment is offsettng jòb losses elsewhere, at least in numericalterms. Between the final quarters of 2001/2 and 2002/03 the employment rate in the region has risen 1.2% to73%, a gain of 51,000 to 3.06m. Unemployment has fallen from 5.4% to 5%. Though investment intentionsremain subdued, both manufacturers and service sector companies appear to be maintaining capitalexpenditure plans.

-Confidenoe;Costs, PrioesandCashflow ...

Business confidence in the North West remained much higher in services than in manufacturing throughoutthe year, but both sectors show some deterioration in sentiment since autumn 2002. The sharp climb in oilprices prior to the Iraq war led to sharp increases in raw material costs in manufacturing and pressure onmargins. However since then oil prices have dropped to around $25 and the slide in the exchange rateshould see margins improve, especially in export markets. In the service sector overheads and pressure onpay rates in tight labour markets are the main factors driving unit costs and expectations of price rises.Settlements in the public sector are increasingly outpacing increases elsewhere. Pressure on cash-flowremains a serious concern in both manufacturing and services.

Sources:North West Chambers of Commerce April 2003EEF Engineering Outlook, March 2002CBI Regional Trends Survey, May 2003Bank of England Inflation Report, May 2003Business Forecasts Northwest - a report by the NorthwestEconomic Forecasting Panel, Spring 2003

4

SUMMARY OF NWDA EXPENDITURE AND PERFORMANCE 2002/03.

Expenditure

Expenditure % of total

£m expenditureBusiness Development 58.0 19Regeneration 194.9 62Skils and Employment 7.4 2Infrastructure 12.4 4Image 4.9 2Administration 21.9 7Coalfields 1.5 1

Speke Garston Developments Ltd 10.8 3Grand Total 311.8 100

Core Outputs

Target ActualJobs Created I Safeguarded* 14,532 16,764New Businesses Created / Attracted **418 603Brownfield Land Remediated / recycled (Ha) 442 488Learning Opportunities Created **22,215 23,815* Excludes Inward Investment

** Figures were reduced during the year following negotiation with DTI

Supplementary OutputsTarget Actual

New/refurbished floorspace (sq m)' 88,207 282,226Businesses Receiv'inQ Specialist Advice 624 814Businesses Assisted in. skills needs ,( 2,600 1,312Woodland created (ha) " 72 154

1 Targèt substantially exceeded due to the quantum of SRB funded deyelopment which was not foreseen

when the target was set in the SRB delivery plans èarlier in the year.

2 Target not achieved. A re-appraisal of outputs arising from the Agency's skills programme took place during

the year that suggested that the original target was unrealistic.

3 Target significantly exceeded due to the development and implementation of a new community woodland

initiative which was not foreseen when the target was originally set.

5

Chief Executive's Review of the Year

This has been another successful year for the Northwest Development Agency, against a background ofcontinuing change both in terms of developments and events within the region as well as additions andchanges to RDA roles and responsibilities. During 2002 /03 we helped to create or safeguard over 16700 jobsand create or attract over 600 new businesses, reclaim and remediate almost 500 hectares of brownfield landand create over 23,500 learning opportunities.

The Agency has been instrumental in driving forward some major initiatives which will impact positively on theregion's economy, including:

· The acquisition of the Marconi site which will house Liverpool Digital, a project that will make full use of thetelecommunications infrastructure already in place and will contain business and incubation activitiestogether with higher education teaching and research facilities.

· Project Unity, the proposal to establish a new Manchester University as a world leader in higher education,research and knowledge transfer.

An Urban Regeneration Company for Furness and West Cumbria and a Rural Regeneration Company forCumbria to help drive forward the economic development of that area. These Companies were notincorporated until the new financial year.

· The Fourth Grace, Liverpool which will have a major impact on the economic effectiveness of Liverpool CityCentre and the Capital of Culture 2008.

Work to improve and develop the rural economy continued throughout the year and at the beginning of the yearwe launched Rural Renaissance, the Regional Rural Recovery Plan. Throughout the year we developed countyrecovery plans for Cumbria, Lancashire and Cheshire to the value of £85m, which are now being implemented.It was also reassuring that the evaluation of the Agency's support to rural areas during the Foot and Mouthcrisis in 2001/02 identified that 1650 jobs had been safeguarded and just under 2,300 learning opportunitieshad been created as a result.

The Agency's Inward Investment programme resulted in a number otkey projects from overseas andelsewhere in the UK that will bring 7800 new jobs to the region. Also as part of our continued business supportprogramme the Agency initiated a programme of strategic business intervention to identify future risks andopportunities for major companies of regional or sub-regional significance, to help secure their investment inthe region and thus retain employment opportunities. By the end of the year, there were 100 such projects inthe Agency's management portfolio.

The revised Regional Economic Strategy launched in March 2003 continues to drive the Agency's agenda andprovide the framework for the region's economic development. The Agency began the review of the RegionalStrategy in January 2002 and included a comprehensive consultation process over the summer: over 400consultation documents were circulated to regional partners for comment; over 700 partners attended sixregional consultation events which were supplemented by a range of sub - regional and sector specific events;

----300-eempletedcquestionnaireswerereceived;l"he exercise confirmedtheexcellenìpartnershipworking'arrangements that are in place in the region and the Agency will continue to work with those partners to ensureimpl1ementation of the priorities outlined in the Strategy.

In April 2003 the Agency began to deliver the joint SBSILSC pilot that aimsto raise the region's productivity andeconomic performance through closer integration of skils development and business support in alignment withthe RES. Again the support and involvement of partners from the private, public, voluntary and communitysectors will be crucial in bringing about the successful delivery of the pilot.

The Agency's BUSiness Plan for the year 2002/03 set objectives for the following priorities: BusinessDevelopment, Regeneration, Skils and Employment, Infrastructure and Image. The following pages illustrateour key achievements against those priorities and objectives.

Michael ShieldsChief Executive

6

NWDA KEY ACHIEVEMENTS 2002/03

BUSINESS DEVELOPMENT

Rural Economy:

In addition to the longer - term decline in the agricultural sector the impact of BSE and associated downwardpressures on farming incomes had already combined to weaken the rural economy before the emergence ofFoot and Mouth Disease. Despite this, the long - term future of agriculture is important because 80% of theregion's land base is agriculturaL. The landscape is a key component of the tourism attraction of the region. FMDillustrated how effects on one sector can impact upon another.

In April 2002 the Agency published Rural Renaissance, the region's £400m strategy for rural recovery over thenext five years and in addition, during the year:

A new Cumbria Rural Regeneration Company was approved and established January 2003;

Rural parlnerships for Lancashire and Cheshire were put in place;

Five-year recovery schemes for Cumbria, Lancashire and Cheshire starled. (£85m); and the following majorregional rural recovery projects were put in place:

NW Speciality Foods Cumbria Tourist Board Marketing

Rural Planning Service Farm Tourism Initiative.

Science:

The Northwest is rich in science, technology and talent. Its companies, universities, colleges and researchinstitutions are home to people who are using science to create new businesses, develop better products andservices, improve the environment, protect health and enhance the quality of life. The region's science base isa key contributor to realising the RES vision through its impact on business, health, education and culture. Itcan encourage high quality inward investment and ensure a supply of well - trained people for the future.

In December 2002 in conjunction with the Northwest Science Council the Northwest Science Strategy waslaunched. The strategy focuses on business clusters in the following sectors: Biotechnology, Aerospace,Chemicals, Environmental Technologies, and Nuclear Energy. It has been designed to build on the region'sstrengths, such as Jodrell Bank, the most sensitive, high-resolution imaging radio-telescope in the world.

In addition to Jodrell Bank, Daresbury Laboratory is also showing enormous potential to develop as a centre ofscientific excellence and during 2002/03 significant progress was made in securing its future due to thefollowing:

the installation of the fastest supercomputer in Europe;

approval obtained for the Daresbury Science Park, construction starled April 2003. (£26m) ; and the

-----~-gõafjeaâreceiveâfti5mDTl1önfie7ésearcfj;~âéVé/ölJftlfHjrafjâ~desitjifpfjases-öfthffWotldc/ässFöUltfj- --- - - -...-Generation Light Source at Daresbury, to create the world's leading synchrotron facilty. (NWDA wil make afuture contribution).

Cluster Development Programme:

Considerable economic and government policy research has confirmed that a key factor in successful regionaleconomies is the presence of thriving clusters of businesses with networks to support them. Businesses withinclusters typically have higher Gross Value Added (GVA) per capita, invest more in Research and Development,pay higher salaries and export more. The Northwest is over dependent on declining sectors and needs toincrease the proportion of growth clusters and businesses to improve the GVA performance. Hence theAgency's Cluster Development Programme continues to be a key activity within our Business Developmentpriorities. It covers one third of the region's employees and includes the following sectors:

AerospaceAutomotiveAviationChemicals

ConstructionCreative IndustriesDigital IndustriesEnergy

Environmental TechnologyFinancial & Professional ServicesFood & DrinkHealthcare (incBiotechnology)

MaritimeSportTextile~Tourism

7

Key projects progressed through 2002/03 include:

National Biomanufacturing . Centre, Liverpool, providing UK companies with access to R&D materials,approved, work due to starl early 2004. (£16m)

Core Technology Facility, to supporl incubation starl-ups in the Manchester health corridor. Approved, workdue to starl early 2003/04. (£11;5m)

Genetics Knowledge Park, NoWGEN, to develop clinical and academic genetics research. Starled July 2003(£1.4m)

Infolab 21, Centre of Excellence in Telecommunications Research at Lancaster University. Work starled May2003. (£10m)

Centre for Environmental Research and Technology Transfer (CERTT), East Lancashire, a centre ofexcellence in environmental experlise. Scoping study starled. (£O.3m)

Aerospace Innovation Centre, to add wealth to the region through exploitation of existing research and theinnovation of new technologies. Phase 1 starled February 2003. (£3m)

NWDAlERDF programme to provide additional supporl to businesses in target sectors, started. (£13m)

Innovation and Incubation:

Innovation is a key route to world-leading competitiveness. New products and the application of leading-edgetechnologies and original ideas help companies develop new markets, increase exports and improve theirbottom line. Agency-funded programmes are pitched at both raising awareness of the benefits of innovation,thus effecting a culture change across the North West, and providing the tools, linkages and infrastructure toaccelerate technology transfer and the birth of new knowledge-driven companies. The incubation programme iskey to the Agency's innovation objectives and the Agency is funding a network of new incubators linked intoindustrial clusters and universities. During 2002 the following took place:

Harris Knowledge Park, Preston incubator became operational September 2002. (£O.6m)

Bolton incubator, for business starl-ups developing technology-based products, opened October 2002. (£O.Bm)

Xpdia, the Warrington Incubator for the mobile telecommunications sector opened June 2002. (£O.9m)

Work starled on the Bolton Technical Innovation Centre, pilot project which aims to nurlure creativity andentrepreneurship.in school age children. (£2.3m)

The joint NWDAlERDF programme, Motivating Businesses to Innovate was launched, which promotesinnovation and Knowledge Brokerage Service. (£1.7m)

Inward Investment

Inward investment is a crucial economic driver for the region. It delivers employment, higher salaries, advanced--skills,new-teehnolegiesandapositiveimage efthe. region: The 'Northwestcontin ues-tobe 'an attractive location 'for international business. The NWDA is a single point of contact for overseas companies wanting to set-upbusiness ventures in the region. The Agency traditionally sought investments from the US, Europe and the FarEast, and these are still largely the target markets, although Canada and Australia are now emerging asvaluable sources of small high-value projects. Marketing efforts are directed at attracting investments thatenhance the Agency's cluster development programme in Business Services, Softare, ICT, Life Sciences,and Advanced Tèchnologies.

Potential investors in the key North American market are marketed through the North of England InwardInvestment Agency - a collaborative venture between the NWDA, One North East and Yorkshire Forward. Thisventure has allowed the Agency to match competitors and to provide a wider range of investment opportunitiesto the US and Canadian companies. A similar North of England collaboration is being developed in Japan withthe aim of full integration by 2005. .For 2002/03 the Agency's major successes include:

Ticketmaster (Manchester) Expansion of Call Centre, 350 new jobs.

MBNA Europa Bank (Chester) Expansion of existing operation through the establishment of aEuropean Telemarketing Centre which wil create almost 1,300new jobs.

8

BNY Securities (Liverpool) Parl of the Bank of New York, 184 new jobs.

Car gill Dry Corn Ingredients (Liverpool) A' new state-of-the-arl masa flour plant at its Seaforth sitesafeguarding 50 jobs.

Creation of service centres for Michelin (223 new jobs) and Exxon (350 new jobs).

Business Support

The Agency's business support programme provides help for small and medium size enterprises (SMES), fromcorporate mentoring to delivering best practice in social and community enterprises. Services and "tool kits"have been developed to improve efficiency, develop new markets, help inward investors with grant assistanceand support larger "at risk" companies. Apart from delivering its own portfolio of services the Agency has aco-ordinating role. Much of what it does is about getting other groups and organisations to act in coherentmanner. It is alsousing its mandate and authority to improve the quality of advice available in the region. TheAgency has responsibility for the management of the Regional Selective Assistance (RSA) funding programme,for which a total of 47 grants, totaling £ 16m were offered and accepted during the year.

Other key achievements under Business Support include:

Supporl to Business Links: Data base system installed across the BL network to provide SMEs with easyaccess to BL services and enable Business Links to assess SME needs. (£2.2m)

Micro Business Networks estâblished in East Lancashire.

Barrow Task Force created to address the redundancy problems and the action needed to stabilse theeconomy in the area.

Lillyhall Business Centre opened August 2002. (£2.3m)

The manufacturing sector is crucial, not only to the economy of the region but to the economy of the nation as awhole. Nationally, manufacturing provides 4 million jobs and 60% of exports, while in the North West, itemploys more than half a million people and contributes over 25% of the regions GDP. The NWDA is workingwith the manufacturing sector through the established industry cluster programmes to promote and share bestpractice. In April 2003 the Regional Centre of Manufacturing Excellence was opened. The centre aims toprovide help and assistance to SMEs to help them improve productivity and develop enterprise and innovation.This was followed by the launch of a Regional Manufacturing Action Plan which aims to improve regionalproductivity levels, increase investment, encourage exports, . promote innovation and share best practice.

Business Finance

The Agency plays an innovative and pivotal role in helping the region's small and medium size companies andentrepreneurs have easier access to growth capital from a widening range of providers including BusinessAngels (private investors) and venture capital funds.

Most Business Finance activities are delivered under the TEChlNVEST brand, an independent 'marriagebureau' service for unquoted companies seeking finance and potential investors. The low-cost.support service

- was 'set ülr'fO~yÈfars' ag6~anâ-irflas~gÎv€m EfqUiWfinancEfaâvicetõ-2500-compaiiieäãnd lielped-450-cõ-mpaiiies--raise £13 million from private investors in amounts ranging from £2.5k to £500k.

The Agency also has a facilitating and monitoring role in the creation of new funding initiatives. During 2002/03a portfolio of business finance schemes put in place as follows:

NW Equity Fund, value £35.5M, Rising Stars Growth Fund, value £10M,

NW Business Investment Scheme, value £70M

Social Economy:

The Agency recognises the importance of the social economy and in particular, social enterprises in potentiallyproviding services which would not otherwise be available, providing employment and training for a range ofgroups, countering diecrimination in the labour market and helping build individual confidence and communitycapacity. During 2002/03 the following initiatives were progressed:

Social Enterprise on Merseyside: a number of projects put in place in partnership with Merseyside Horizons.

Enterprise Fund established October 2002, in the Greater Manchester area. (£OAm)

Figures in brackets denote NWDA funding

9

Community Loan Fund launched by Merseyside Special Investment Fund, value £2m.

Community Enterprises:· Manchester Environmental Resource Centre' at Ancoats approved to provide new business units for small

businesses and other community enterprises. To be constructed through the use of an intermediate LabourScheme.

· Training and Enterprise Centre, Norlh Liverpool: funding approved. Provides facilties to support localemployment initiatives and small community businesses.

REGENERATION

Urban Regeneration Companies:

Urban Regeneration. Companies are special purpose vehicles to tackle áreas of intensive need that requirefocused attention with opportunities for large scale redevelopment. The Agency is a major partner in theregion's three URCs:Liverpool Vision, New East Manchester and the more recently established URC for WestCumbria and Furness, known as West Lakes Renaissance. During the year the Agency helped to establishWest Lakes Renaissance and also continued to support Liverpool Vision and New East Manchester throughthe progression of the following projects:

Liverpool Vision

· A series of major acquisitions to faciltate land assembly and redevelopment.· Preferred scheme selected for the' Fourlh Grace development.· Environmental improvements at strategic locations in the city centre. (£4.6m)· Major office development at Old Hall St. (£1.9m)

· The FACT Centre for filmarland creative technology. (Opened February 03). (£2.8m)

New East Manchester· Norlh Manchester Business Park CPO confirmed. Demolition works and land remediation starled. (£2m)· Ancoats Urban Village CPO confirmed and public realm works approved.· Athletics and major events arena approved. (£3m NWDA / ERDF funding)

Local Strategic Partnerships:

The Agency believes that areas of mixed problems and opportunities need to be addressed at district levelthrough Local Strategic Partnerships (LSPs) and during the year worked closely with the LSPs in in thefollowing 25 priority regeneration areas to develop Neighbourhood Renewal and Community Strategies.

AllerdaleBarrow in FurnessBlackburn with DarwenBlackpoolBoltonBurnley

Cope landEllesmere Port with NestonHaltonHyndburnKnowsleyLancaster

LiverpoolManchesterOldhamPendlePrestonRochdale

SalfordSeftonSt HelensTamesideWest LancashireWiganWirral

--STiig7ii-RiiiiiiifeiatiOiJ8údgelal1dposf SRB Schemes

During 2002/03 the Agency continued to deliver 98 SRB schemes under Rounds 1 -6, of which 17 completedin March 2003. The Agency also progressed a number of post SRB programmes as follows:

South Cheshire, bringing sustainable improvements to a deprived area of Crewe (second year) (£3m)Business Employment Support Strategy (Mersey Dee Allance), focusing on skils development, training andbusiness supporl. Three-year programme starled October 2002. (£1m)

West Lancashire Regeneration Programme designed to encourage economic regeneration. Approval given;five -year scheme due to starl in 2003. (£8m)

Distinctly Cumbrian provides both a capital and virlual infrastructure for Cumbrian producers of local goods toaccess under-exploited markets both within and outside the County. Seven year programme starled July 2002.(£4.8m)

Barrow Regeneration focusing on the regeneration of the borough of Barrow in Furness: Six -year schemestarled August 2002. (£15m)

Figures in brackets denote NWDA funding.

10

Pen die Regeneration seeks to strengthen and invigorate the economic framework of the Borough of Pendle.Five -year scheme started April 2002. (£3m)

Wigan Regeneration which aims to develop a strategically imporlant Economic Development Zone. Six-yearprogramme started December 2002. (£7m)

Coastal Resorts and Market Towns

The Northwest's coastal resorts have been particularly badly affected by the massive reduction over the pastthirty years in the number of long holidays taken in the UK as people have instead chosen to go abroad. Thedecline is all too evident in Morecambe and Blackpool as well as South port and St Annes.

In April 2003 the Agency published the New Vision for Coastal Resorts which provides an indicative frameworkfor the revival of the resorts in the region and a vision for what they could be like in 10 to 20 years given therealities in tourism trends. Specifically the Agency has also helped with the production of the BlackpoolRegeneration Masterplan which aims to provide a blueprint for the future of Blackpool combinìng spatialdevelopment planning (200 hectare area) with a more refined set of plans for the 4km seafront area.

The Agency and the Countryside Agency support the regeneration of selected market towns across the region.Subsequently during the year "Health Checks" and action plans were put in place for the following MarketTowns.

Ambleside & WindermereBarnoldswickCarnforth

ClitheroeCockermouthEgremont

FrodshamGarstangKeswickLongtown

MillomNestonPadihamPenrith

SandbachSiloth & AspatriaUlverstonWigton

Regional Land Reclamation Programme:

The level of derelict and underused land and buildings are a serious impediment to investment and growth inmany areas in the region. The Agency's Land Reclamation Programme focuses on the reclamation of derelictand underused brownfield land to create new development sites, parks and woodlands. This includesNewlands, a major project in partnership with the Forestry Commission to achieve a step change in landreclamation activity across the region. Phase 1 of the project was developed and approved during 2002/03;implementation will start early in 2003/04. (£23m NWDA lifetime cost)

In addition the following activity took place:

Sub Regional programmes for Cumbria and Lancashire developed.

Lancashire small sites programme: Work starled.

Lostock Valley Community Woodland Project at Leyland: Work started.

Norlhwich, Cheshire: approval given to reclaim the former industrial areas. (£2m)

Mersey Waterfront: £60m scheme to create a regional park around 70 miles of coastline develòped and NWDA--- cöntril:Ufion' of£8.Smapproved. To startearJy2003/0i4.

And the following projects were completed:

West Cumbria Woodland Planting. 49Ha of reclaimed land and new woodland.

Kingmoor Park, Carlisle and Lee Quarry Rossendale. Combined total of 120Ha reclaimed.Rochdale Canal. 42Ha of reclaimed land.

North West Regional Housing Board established.


11

Discussion initiated with key parlners on Land Management Plan.

NWDA Policy Statement issued June 2003.

SKILLS AND EMPLOYMENT

An effective skills base is an essential element of a successful economy. Strong demand, providing a widerange of jobs at all skills levels is needed to attract and retain a skilled workforce to meet employers' needs.Strong supply will provide sufficient numbers of highly skilled, qualified and experienced workers to meetemployer requirements. In October 2002 the Agency produced the Framework for Regional Employment andSkils Action (FRESA) "Productivity through Employability" which clearly sets out the key labour market issuesin the Northwest and how they will be tackled. FRESA forms an integral part of the RES and its supportingaction plans. Other developments and activities within the skils agenda for 2002/03 include:

Skils Development Fund (SDF): 31 existing projects delivered.

Workforce Development: Projects delivered as follows:· Sectoral Skils Gaps - The Graduate Dimension launched (£1.1 m)

. Initiative to develop pilot projects to help prepare post 14 schoolchildren for the future workforce.

. Major Research project undertaken to identify employment characteristics if the cultural sector.· Cheshire and Warrington New Technology initiative.. NW Skils Workplace Based Learning Network launched.

National Skils Festival: Supported throughout the year; sponsored Skils Show, November 2002.

NW Learning and Skils Forum: NWDA continued to lead.

INFRASTRUCTURE

ieT Broadband:

Increasingly the region's competitive position will depend on access to and use of Broadband and ICT facilities.The Broadband infrastructure of the region is incomplete, particularly in rural and remote areas and take up ofprovision in well served urban areas is low. To address these issues during 2002/03 the Agency:

implemented the Regional Broadband Action plan and sub regional action plans were also developed andpublished;

progressed Project Access, which aims to deliver broadband services across Cumbria. (£30m) ; and

instigated the provision of a Broadband link between Daresbury Laboratory and Lancaster University to developfurlher research collaboration. (£1.5m)

Transport:

An efficient transport system is of fundamental importance to the region's economy. Businesses and people-------need-good-accessboth-within.. the region-and also toother-reg ions ,intheU Ki-the-rest-of~uropeand-theworld -.-

by land, sea and air. The current transport infrastructure is inadequate to meet present and future needs andthe resultant problems and costs are impeding the improvement to the region's economy. To help drive forwardimprovements to the transport systems in the region the Agency made a full contribution to the RegionalTransport Strategy as a key part of the Regional Planning Guidance. The Agency also initiated thedevelopment of à strategic vision for transport investment across Northern England; and on behalf of threenorthern RDAs, commissioned a report on the North of England Airport Strategy that has now been submittedto Government.

Strategic Sites:

It is vital to the region's economy to have a balanced portfolio of employment sites in terms of quality andsustainable development to help encourage large and small - scale developments and in turn provideindigenous growth and inward investment at regional and sub regional leveL. The NWDA identified 25 sites ascritical to .the effective implementation of the RES. To date progress is as follows:

Rochdale Kingsway: Development agreements signed covering 170ha and £80M of investment. Further landacquisitions increased the Agency's land holdings to 60% of the site; CPO made in . May 2002. Public Inquiryheld June 2003.


12

Omega, Warrington: New Junction 8, M62, providing direct access to the Omega site opened.

Daresbury Park, Warrington: Work started on a new Science Park.

Kingmoor, Carlisle: Site reclamation, infrastructure and servicing completed

Nbrlh Manchester Business Park: CPO confirmed, possession of land taken and demolitionlremediationstarted.

Estuary Commerce Park, Speke (Liverpool): Gap funding of over £4.3M approved to support three separatedevelopments at the site.

Kings Business Park, Knowsley: £1 M gap funding approved to secure second phase development.

Waverlree Technology Park, Liverpool: Adjacent Marconi and MTL sites acquired in pursuit of the LiverpoolDigital concept. Wil incorporate the Technology Park

Wirral International Business Park: Further gap funding agreed to secure development at prime locations.

MARKETING

It is important to market the region, promote its assets and tackle negative perceptions to help increaseeconomic activity, attract further investment and boost business and leisure tourism in the Northwest. A majorachievement for the region was the success of the Commonwealth Games and in addition to the support thatthe Agency provided to the Games a programme of marketing activity was also developed building on theGames success.

In addition the Agency progressed the following:

extensive development of englandsnorlhwest. com regional portal;i

the launch of "englandsnorthwest", a new book about the region;

the launch of the Liverpool/Manchester Cultural Campaign;

supporl for the Liverpool Capital of Culture bid;

development of a Branding and Communications Strategy;

organisation of the Annual General Meeting October 2002: (Over 500 guests attended with strong privatesector representation); and the

promotion of Creative industries in New York that included a programme of events and business meetingsinvolving fashion, film, mu.sic and arl to promote the Norlhwest region.

Other promotional projects include: .. Poster sites and fim showing at Manchester and Liverpool airports to welcome visitorS to the region.

_____---~-~Two-shortfimsprQduce,dJo-promQte.Jhe,region,-one__dealing.with-the~landsc.afle."andpe.oplÐ_andtbe.otheL,with scientific breakthroughs.

Tourism:

Tourism is crucial to the economic well being of the region. The Agency now has an enhanced role in thestrategic development of tourism in the Northwest and the Agency in conjunction with the Northwest TourismForum published a Regional Tourism Strategy early in 2003 and action plans were published inJune 2003.

Thè Agency also developed a North West programme and campaign to promote the region's rural areas asvisitor attractions, in partnership with the two Tourist boards. .


13

PARTNERSHIP WORKING

The Agency has continued to work with partners at regional, sub regional and local level to establish therevised Regional Economic Strategy. There are a number of key stakeholders with whom the Agency hasdeveloped strategic and operational relationships. They are as follows:

North West Regional AssemblyConfederation of British IndustryCommission for Racial EqualityNW Business Leadership TeamSub Regional PartnershipsLocal Authorities

Higher Education Funding Council

Local Learning and Skills CouncilsNW Universities AssociationInstitute of DirectorsCountryside AgencyEnvironment AgencyEnglish HeritageRural Development Service

Government Office NWSmall Business Service

Forum of Private BusinessesNW Association of CollegesThe Housing CorporationUrban Regeneration CompaniesAssembly of Economic Partners LtdNW Chamber of Commerce and IndustryNW Arts BoardVoluntary Sector NWCommission for Advice on the Built EnvironmentNW TUCNW Cultural ConsortiumInvest UK

The Agency has a productive working relationship with its Concordat partners:

Government Office North West:RDA sponsorship and performance monitoring.European policy and funding.Regional dimension of Government policy on business development, urban and rural regeneration,planning, transporl, environment and skils.

North West Regional Assembly:RDA scrutiny.Regional Planning Guidance, Regional Transporl Strategy and Action for Sustainabilty.Regional approach to economic development, planning, environment, transporl, and European affairs.

During the year' the Agency became a partner in the 24 LSPs which operate in the region's 25 priorityregeneration areas and subsequently made a full contribution to the development of neighbourhood renewaland community strategies in those areas.

The Agency is also:

Helping to realise maximum benefits from the European funding available to the region to 2006 and is workingwith partners to ensure expenditure targets are met.

Working closely with the NWRA to further develop the role of the North West office in Brussels to bring added--value-toctheregion and.with DEFRAto help inform theCommoncAgriculturaIPoIiGy~CAPl.-~

In addition the Agency has, during 2002/03:

Initiated the development of a strategic vision for transport investment and management across NorthernEngland to drive and underpin economic growth and regeneration over the next 20 years. This work will beprogressed during the 2003/04 in partnership with One North East and Yorkshire Forward.

Commissioned a North of England airport strategy on behalf of all three northern RDAs. The coherent plan ofairport provisionin the North was presented to the Government in response to its national consultation on thefuture development of air transport in the UK.

14

NWDA GOVERNANCE

The Board

In December 2002 three Board Members left and were replaced by three new members.

Each Board Member has taken responsibility for a key area of business and has exercised that role on behalfof the Agency throughout the year.

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

Bryan Gray MBE (Appointed 1 sI April 2002)Chairman of NWDA. Deputy Chairman of the Baxi Group Limited since 2000. He was Chairman of the CBINorth West Region until November 2002 and is currently Deputy Chairman. He was a Member of the Board ofthe University of Central Lancashire until April 2003 and has been appointed Pro-Chancellor of LancasterUniversity from August 2003. He is a former Chairman of Preston North End Football Club and is a Trustee ofthe National Football Museum (Chairman unti October 2001). In June 2002 he was appointed a DeputyLieutenant for Lancashire and was appointed High Sheriff of Lancashire in April 2003.

Professor Sir Martin Harris CBE, DL (Appointed December 2001)Deputy Chairman of NWDA. Vice Chancellor, University of Manchester.NWDA area of responsibiliy Health.

Nevile Chamberlain CBE (Appointed December 2001)

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

John Dunning CBE, JP (Appointed December 1998)

Directorof Westmorland Ltd. Chairman, Cumbria Rural Enterprise Ltd.NWDA Area of Responsibility: Rural issues including agriculture, tourism and market towns.

Clive Jeanes OBE (Appointed December 1998)Former Managing Director of Milliken Industrials Ltd, Chairman of Elwers Engineering Ltd, and Chairman ofExcellence North West. Member of the Cheshire and Warrington Learning and Skils Council and RDArepresentative on the NW Science Council and New East Manchester.NWDA area of responsibilty: Manufacturing, Business Excellence and SMEs.

Robert Johnston (Appointed December 2002)

Managing Director of The Visual Link Ltd, Director of Enabling Education Excellence and Director of The VisualLink Holdings Ltd. Member of the Cumbria LSC.NWDA Area of responsibility TechnologyandlT

.'--ÐrPauleenLane' (Appointed December2001)--

Lecturer in Geotechnics and Computing, Manchester Centre for Civil and Construction Engineering, UMIST.Deputy Leader Trafford MBC, Director English Partnerships, Audit commissi.oner.NWDA area of responsibilty: Support in regeneration including Health, Environment, Derelict Land andHousing.

CUr Richard Leese CBE (Appointed December 1998)Leader (Labour) of Manchester City CounciL.NWDA area of responsibiliy: Infrastructure, East Manchester, relationships with Local Authorities and localstrategic parlnerships, Design Champion.

Alan Manning (Appointed December 1998)North West Regional Secretary of the Trade Union Congress. Member of the Greater Manchester Learning andSkills CounciL.NWDA area of responsibiliy Skils, European matters, Social Inclusion, Black and Ethnic Minorities, Crimeand Disorder.

Dennis Mendoros OBE (Appointed December 1998)Managing Director of Euravia Engineering: Chair of the NW Aerospace Alliance and member of the NW Bankof England Economic PaneL. Chair of Pendle Partnership and Director of Northern Technologies. Chairs theNWDA-Ied NW Innovation and Technology Advisory Board.

15

NWDA area of responsibility: Business Supporl, Innovation, Technology, Foresight, the e-commerce element ofICT and Aerospace.

CUr Marie Rimmer (Appointed December 2002)Leader (Labour) of St Helens CounciL. Chair of the Local Strategic Partnership, a Director of St Helens

Chamber and The World of Glass, a Board Member of the Mersey Partnership, the North West Civic Forumand the North West Constitutional Convention.NWDA area of responsibilty: Relations with the Regional Assembly

Ani! Ruia OBE (Appointed December 2001)Director of Wrengate Limited. Chair, NW International Trade Forum.NWDA area of responsibilty International Trade and Inward Investment

Brenda Smith (Appointed December 2001)

Managing Director, Granada Television, Managing Director, Studios Granada Plc. Board Member, LiverpoolVision. Chair of the Regional Marketing Forum from December 2002.NWDA area of responsibilty: Support in Culture, Media, ICT (creative aspects) Communications.

CUr Mike Storey CBE (Appointed December 2001)Leader, (Liberal Democrat) Liverpool City CounciL. Board Member for Mersey Partnership, Speke GarstonDevelopment company until 31 March 2003, Liverpool Land Development Company from 1 April 2003,Liverpool Vision and Liverpool John Lennon Airport. Head TeacherPlantation CP School, Knowsley.NWDA area of responsibility: Voluntary, Mutual and Charitable interests.

Dr Maureen Wiliams (Appointed December 2002)Chief Executive and founder of Merseyside Development Foundation; Co-founder of Community North West.Appointed to the Chair of the North West Regional Awards Committee of the Community Fund in 2002 anddeputy Chair of Telescope Technologies. Pro-Chancellor and Chair of the Board of Governors Liverpool JohnMoores University until 31 March 2003. Member of the Merseyside Learning and Skills CounciL.NWDA area of responsibility: Relationships with Local Parlners, LSPs/Community & Voluntary Sector

Those members who left the Board in December 2002:

CUr Mike Doyle JPDeputy Chairman of the NWDA. Assistant Chief Executive of Business Skills (St Helèns) and St Helens MBCLabour Councillor. Member of the Merseyside Learning and Skills Council until December 2002.NWDA Area of Responsibility: Infrastructure and Transporl.

Felicity Goodey CBE, DLDirector of Precise Communications and Chair of the National Millennium Arts Company - The Lowry. Chairsthe NW Cultural Consortium and the Regional Marketing Forum to December 2002.NWDA Area of Responsibilty: Culture, Media, CommunicatÎons and the Creative aspects of ICT.

Kath Reade.--Chair~oftheccCumbriaandLancash ireStrategic.-HealthAuthority~- -Member,. bancashire .bearningandSkills-

Council until December 2002.NWDA area of responsibiliy: Regeneration, including Health, Environment, Derelict Land and Housing.

, Board Meetings and Committees

. Eleven NWDA Board meetings were held during the year.

. The Remuneration Committee convened 3 times during the year.

. The Audit Committee met 4 times during the year.

There are also a number of Sub Groups to the main Board that have met regularly throughout the year. For2002/03 the Sub Groups were Business Development: Science and Innovation, Business Support; Marketing;Rural Regeneration; Urban Regeneration; Skills and Employment and Infrastructure.

Annual General Meeting

The Agency held an Annual General Meeting in October 2002 at Aintree Racecourse. Over 500 peopleattended and a series of speakers presented the key activities and achievements of the NWDA throughpartnership working. Keynote speaker was athlete Roger Black linking sport, teamwork and regeneration.

16

Code of Best Practice

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

The Board's requirement to demonstrate Public Service Values and their accountability for public fundsThe Board's relationship with Central Government.The role of the Chairman and Chief ExecutiveCorporate and individual responsibilities of Board Members.Handling Conflicts of interest.

The Agency has ensured that the Code has been adhered to throughout the year and' have robust andthorough monitoring and recording systems in place. Board Members have declared interests at particularBoard discussions as appropriate. Staff have followed a similar requirement in compliance with the Agency'sCode of Conduct.

Further information concerning any of the above can be obtained from the Agency's Warrington Headquarters.

Open Government

During the year the Agency has fully complied with the Government's Code of Practice in Access toInformation. In relation.to specific requirements of the Code:

No requests for information were received which specifically referred to the Code;No charges were levied for the information supplied;No replies to requests for information exceeded 20 days;No complaints against the Agency were referred to the Parliamentary Commissioner for Administration(the Ombudsman).

Freedom Of Information Act and the Publication of Information

The Freedom of Information Act became law on 30th November 2000. It aims to foster a culture of openness inGovernment and will replace the Code of Access to Information.

Section 19 of the Freedom of Information 2002 requires every public authority to adopt and maintain apublication scheme which relates to the publication of information by the authority and publish information inaccordance with its publication scheme. In addition section 20 of the Actallows public authorities falling withinparticular classes to produce model publication schemes. Eight of the nine English RDAs agreed to a collectivePublication Scheme which outlines the information that will be published by each of those RDAs. TheNorthwest Development Agency took responsibility for the development of the RDAs Model PublicationScheme and this was approved by the Information Commissioner in October 2002. The Publication Scheme isavailable at ww.nwda.co.uk; \

Service First .

.. The-Agency'sServiceFirst-6hartersets.out our standards of service whendealingwithoutsideorganisationsand the general public. We will provide a level of service that is friendly, efficient and customer focused. Wewill:

Answer the telephone promptly and courteously within 20 seconds;Deal with all written correspondence promptly and efficiently replying within 10 working days;Pay undisputed invoices within 30 days of receipt or within terms agreed with supplier;See visitors on time and never more than 10 minutes after the appointment time.

Equal Opportunities and Diversity

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

NWDA ExecutiveApril 2002 to March 2003.

Michael Shields CBE Chief ExecutiveSteve Ashcroft, Director, Corporate Services John Burrows OBE, Director, Business DevelopmentDr Baron Isherwood, Director, Regeneration Peter Mearns, Director, Marketing:Geoff Parker, Director, Finance: Dr Peter White, Director of Strategy:

17 APPENDIX 1

A First Environmental Audit of NWDA'sActivities: A Summary ReportContext

This document summarises the North West Development Agency's (NWDA) first report on theenvironmental performance of its activities in England's North West. The decision to commission anEnvironmental Audit sends a clear, unambiguous message from the Agency that it is prepared to takeits environmental responsibilities seriously and for those to be examined openly. Crucially, the Auditprovides evidence of the effectiveness of the North West's commitment in the Regional EconomicStrategy to 'improve the region's competitiveness and encourage economic growth, while at the sametime protecting and enhancing its diverse environment1,.

In this, the first year of the Environmental Audit process, a robust methodology has been used todevelop a thorough understanding of the environmental issues resulting from the Agency's internaland external activities. The research has also identified how NWDA's activities can be developed tobetter and more fully define how future Audits should be undertaken. As a result, this Audit has comeforward with a range of action-orientated improvements to the Agency's internal policies andprocedures and is recommending the need to develop environmental awareness within theorganisation's culture. The external influencing role of NWDA is also examined.

The key earl achievements...

NWDA has made significant progress in addressing its environmental responsibilities and improvingits environmental performance. This Audit found that:

. There is evidence of high-level commitment within NWDA to improving the environmental

performance of the Agency exemplified by board-level commitment for this first Audit

. The development of a draft environmental policy, a green housekeeping plan and an

environmental procurement policy are positive demonstrations of commitment to addressingenvironmental issues, which must now be defused throughout the organisation

.-- NWDA naSsystèrlsin place to kèepabreast of legislative environmentalrequirenients atnational and international levels

. The new offices which NWDA occupies have been built to high standards of environmental

performance; its offices at Warrington and Penrith have both received highly positiveBREEAM assessments

. The Agency is undertaking 'rethinking construction' training for staff and key partners toimprove the sustainability of new building developments

. Efforts are underway to ensure that all NWDA's offices now use renewable energy and 'green

tariff certificates' have been obtained for at least three of its premises

i NWDA Regional Economic Strategy 2003 - Chairman's Forward.

17 ~--~:~THE NATIONAL CENTRE FOR

BUS1NESS & SUSTAINABlllTY

18 APPENDIX 1

. Paper recycling schemes are now operating in the majority ofNWDA's offces, and these provide an

excellent model for establishing other initiatives for managing and reducing waste

. A notable proportion of projects funded with Single Programme monies in 2002/03 offer the potential

to make highly significarit improvements to the region's environment.

. Eighty percent of the Single Programme projects reviewed are likely to have at least oneenvironmentally beneficial objective

.. .and some areas of weakness

The Audit identifies a number of specific challenges which should be addressed:

. Currently, there is a low level of awareness across NWDA of existing environmental policies,

and little monitoring of the effectiveness of initiatives in delivering environmental commitments

. At present, it is not possible to benchmark the Agency's environmental performance against

similar or 'best of class' organisations, because underpinning data is unavailable

. The Audit assessed the Agency's performance on the overall management of environmental

issues. In most areas the Agency scored below average.

. Environmental management systems in NWDA are currently less advanced than the majority

of other RDAs reviewed2 as part of this audit

. At present, the appraisal, monitoring and evaluation of Single Programme supported projects

give insufficient attention to environmental benefits and their maximisation.

Recommendations on ways forward

The Audit highlights that there are significant aspects of NWDA activity which require improvement, .. .both in terms of internal processes and policies and through Single Programme expenditure. But italso presents an exciting way forward for the Agency which builds upon the momentum generated bythis Audit. The report identifies some 27 separate recommendations which the Agency should actupon over the next twelve months. These have been summarised into the following ten themed

--recommendations as presented below,

1) Develop a comprehensive Environmental Policy with associated objectives andperformance indicatorsBuilding upon the current draft policy, a comprehensive Environmental Policy should be developed.The policy should include a clear set of aims with respect to the environment and should be publishedboth internally and externally. The current set of objectives should be revised, clear and measurableindicators identified and responsibilities assigned.

2) Establish an integrated approach to Environmental ManagementCurrent ad-hoc initiatives should be coordinated under an Environmental Management System (EMS)which provides systematic delivery of commitments made in the environmental policy. The EMSshould be driven by a senior-level Steering Group, Chaired by a Director, which reports regularly toNWDA's Board.

2 NWDA was compared with five other Regional Development Agencies

18 ~-.-:~/.f

THE NATIONAL CENTRE FOR

BUS1NESS & SUSTA1NABlllTY

19APPENDIX 1

3) Build internal capacity and embed environmental awareness into organisational policiesand activitiesNWDA should increase staff awareness of environmental issues, and the commitments made in theAgency's environmental policies. Senior management should take a lead in stimulating a broad anddeep ownership of these commitments.

4) Improve measuring and monitoring of resource use and environmental impactsNWDAshould establish procedures for monitoring its waste production and energy, transport andwater use. Data, should be collected and used to assess NWDA performance against targets andstandard benchmarks.

5) Improve performance in key areas of energy, waste, transport, procurement and biodiversityThis should include the publication and promotion of specific commitments in the Environmental

. Policy, setting clear and measurable targets and rollng out initiatives across NWDA. Such initiativesshould include the expansion of paper and other recycling initiatives to all NWDA offices as well asother waste streams and the development of a green transport plan. Steps should als,o be made tohelp suppliers respond more effectively to NWDA's environmental requirements.

6) Enhance NWDA'sinfluencing role in the regionNWDA should take a lead in shaping environmental thinking and actions in the Region. The Agencyneeds to explore wider opportunities to promote and generate positive environmental outcomes

through its influencing role.

7) Establish a consultative 'Environmental Forum' of external stakeholdersThis Forum would ensure that the Agency's approach to environmental issues draws upon, and isenriched by, 'regional stakeholder views.

8) Develop a communications policy for environmental issuesEnvironmental issues should be embedded within NWDA's communication policy, ensuring thatsuccesses are celebrated, aims and objectives communicated (both internally and externally) andgood practice shared.

9) Position environmental issues centre stage of project development, appraisal and

monitoring,~ThejnitiaLandJull application. forms used in NWDASingle Programme processes should give greater

attention to environmental issues. Similarly, the Agency's Single Programme Guide for staff should beaugmented, and training workshops for Project Champions and Appraisers established. In addition,NWDA should ensure that the review of Tier 2 and 3 indicators results in the inclusion of appropriateenvironmental indicators against which to measure performance. A list of measurable environmentaloutputs should be developed for use as a prompt to Project Champions and Appraisers.

10) Complete an annual Environmental Audit as part of a 'cycle of improvement'An Environmental Audit should be undertaken each year in order to measure progress against theobjectives and targets in the Environmental Policy. The Audit should identify actions to improveenvironmental performance both within NWDA and the wider region. These should then be actedupon before the next Audit as part of a 'cycle of improvement'.

19 '~:~--':/~._,.

THE NATlONAL CENTRE FOR

BUSINESS & SUSTA1NABll1TY

20 APPENDIX 1

Looking ahead

The early achievements outlined above highlightNWDA's clear and certain determination to improvingits environmental performance. They are, however,only the first steps on a long and challenging road.Building on these early foundations, (as the graphicon the right shows) the challenge is now to extendand fully embed these achievements at the same timeas developing a much more systematic approach forreporting on progress in the future.

Securing real and substantive improvements in

environmental performance in any organisationrequires commitment at the most senior level,complemented by effective management andexecution at the operating leveL. This first Audittherefore provides the launch pad for a process ofcontinuous improvement Le. as environmental

management systems are enhanced so the detail,coverage and accuracy of the Audit can be developedyear -on-year.

This report forms a positive start to enhancing the environmental p~rformance of NWDA. If the.recommendations can be integrated into the Agency's operations and culture there is no reason whyNWDA cannot become a leader in environmental good practice.

20

Benchmarking NWDA against Best Practicein Environmental Management

Commitment

Biodiversity .,.. - ,5-

Supply Ch. ain & _ . .~'. 4

Resources" .,',2,, :'

Transport~_ " Objectives &

,! Targets

Wa1er& "

Was1ewa1er .

:Environmenlal

legislation

",'Control &

, , penÓr~a~nagement

Repor1ng

. Our current perfonnance

i: Our aspirations for 2003104

-~~,-~,;:.-THE NATIONAL CENTRE FOR

BUS1NESS & SUSTA1NABll1TY

21 APPENDIX 2

A FIRST SOCIAL INCLUSION AUDIT OF NWDA'S ACTIVITIES:

A SUMMARY REPORT

The. Agency commissioned consultants in Spring 2003 to undertake an audit of its contribution toenhancing economic and social inclusion. The work undertaken included a review of answersprovided by 80 projects applying to the Single Pot in 2002/3 to the application form questions oneconomic inclusion, equal opportunities and impact on different ethnic.groups. In addition 10 casestudy interviews with project applicants and NWDA project Champions took place.

The 80 projects were selected on the basis of highest value and were not necessarily a representativesample of the complete range of projects supported by the NWDA. The projects were organised intofamilies and divided between those making a direct impact and an indirect impact on inclusion. Bestpractice in measures and interventions to enhance inclusion was gathered as were the characteristicsof good answers.

An analysis of the geographic targeting of the sample of projects was also undertaken and impact ofthe 80 projects on Tier 2 and 3 targets examined. The Agency's human resources and procurementpolicies were also reviewed from a social inclusion perspective.

The audit was constrained by issues including the representativeness of the 80 projects and the factthat many of the projects had not started or were in the early stages of implementation. Recognisingthese constraints the following key messages and recommendations arose from the audit:

Key Messages

~ The concept of a social inclusion audit was tested and proved to be a useful way of raising theprofile of social and economic inclusion issues within the Agency and among Champions andapplicants.

~ A relatively small number of the selected projects - 19 - impact directly on economic inclusion,equal opportunities and diversity and on different ethnic groups. The projects having a direct,impact on inclusion were all working in partnership with agencies that will enable them to accessexèluded groups but findings were less positive in terms of research to assess the needs ofdifferent groups and monitoring systems to measure the impact of projects on excluded groups.

~ Examples of specific measures and interventions to promote inclusion included:

Development of partnerships with employers and local agencies to link areas of opportunityand need

Consultation with equal opportunities target groups as part of project design

Use of ICT, websites and community portals to disseminate information to areas of need(including rural areas) and communities of interest.

Producing multi-lingual publicity and marketing materials.

~ The key, general characteristics of relevant and good quality answers to the three questionsinclude a tailored, focused approach, practical examples of measures and interventions to betaken with timescales, evidence of need, consultation and partnership and plans for monitoring.

~ Just under £845 millon of overall funding was committed to the 80 projects reviewed. The NWDAcontribution represents 36% of overall project expenditure on the projects.

~ 47 projects out of the 80 projects reviewed are located exclusively in one of the NWOA 25 targetareas, representing 59% of all projects under review and receiving 36% of all funding.

22 APPENDIX 2

~ The NWDA has committed £133 millon to the 47 projects located in the 25 targetareas. Thisrepresents 43% of the Agency's funding contribution to all 80 projects (and 44% of all fundingdirected at the 25 target areas).

~ In terms of Tier 2 and 3 targets, a high level of general awareness exists amongst applicants butmany applications do not follow through on their claims to contribute to Tier 2 and Tier 3 targetsby quantifying the contribution within the outputs section of the application form.

~ The Agency's workforce is unrepresentative of the Region it' serves and needs to be betterbalanced in terms of ethnicity and gender by pay grade.

~ Little has been done to date to target recruitment at disadvantaged communities or individuals

and to develop objective methods of recruitment and promotion, although a start has been madewhich needs to be built upon.

Recommendations

The Agency should:

~ Repeat the audit on an annual basis but in future years should concentrate on projects that haveprogressed in implementation terms and test to what extent answers to the relevant questions onthe application form have been delivered and how well the types of measures and interventionsreferred to have worked.

~ Issue guidance to applicants and Champions about what the questions mean, how best toanswer them, on the types of interventions applicants can take to deliver inclusion objectives andon contribution towards Tier 2 and 3 targets.

~ Consider offering training to Champions on their role in developing the inclusion aspects ofapplications.

~ Work proactively to change its current wo rkfo rce profile and recruitment practices so that itbecomes more representative of the Region it serves. All Managers and the Board need to beinvolved to make this happen.

~ Seek to maximise the business it does with local companies, especially SMEs and seekguidance from OTI about the scope to do this within the Competition Act.

23

NORTHWEST DEVELOPMENT AGENCY FINANCIAL STATEMENTS2002.2003

FOREWORD TO THE FINANCIAL STATEMENTS

Statutory Background

The Northwest Development Agency was established under the provisions of theRegional Development Agencies Act 1998. It came into existence on 14 December1998, following Parliamentary approval of the Regional Development Agencies Act1998 and the appointment of Board Members.

The Agency became fully operational on 1 April 1999 when it took over the regionalactivities of English Partnerships and the Rural Development Commission and theSRB Challenge Fund formerly administered by Government Office for the North Westunder the provisions of the Regional Development Agencies Act 1998.

The business of Inward Ltd was transferred into the Agency by a Business TransferAgreement on 1 April 1999.

These Financial Statements have been prepared in the form directed by theSecretary of State for the Department of Trade & Industry and the Accounts Directionis set out on pages 70 to 74.

Results for the Year and Transfer to/from Reserves

The results for the year ended 31 March 2003 are contained in the attached FinancialStatements. There was a deficit for the year of £9.23m after taxation (2002: £4.33msurplus), which was transferred to reserves carried forward.

The deficit arises primarily from the activities of Speke Garston DevelopmentsLimited. In addition the Agency has provided for deferred tax of £2.37m inaccordance with normal accounting practice, for which no grant-in-aid has beenreleased to the Income and Expenditure Account.

Significant Changes in Fixed Assets

On 1 April 2002 investment assets with a value of £85.1 Om were held by the Agency.During the year there were additions at a cost of £2.28m and disposals from thisportolio with an aggregate book value of £5.34m and which realised £6.11 m. At 31March 2003 the investment asset portolio was professionally revalued at £82.50mand resultant surplus of £0.46m was transferred to Reserves.

Post Balance Sheet Events

On 1 April 2003, the Agency acquired the remaining share capital of Speke GarstonDevelopments Limited and The Estuary Management Company. On the same date,the business, assets (£10.77m) and liabilities (£8.04m) of Speke Garston

24

Developments Limited were transferred to the Agency for £Nil consideration. Afteraccounting for amounts due between Speke Garston Developments Limited and theAgency amounting to £6.41 m, net assets of £9.14m are expected to be accounted forin the Agency's accounts in 2003-04.

Review of Activities

During the year the Agency continued to operate its programmes of activity acrossthe region in support of the priorities set out in the Regional Economic Strategy. Keyachievements are set out on pages 7 to 13.

With effect from 1 April 2002 responsibility for Regional Selective Assistance (RSA)with offers less than £2m transferred from Government Office for the North West.Related liabilities amounting to £1.35m transferred to the Agency on that date.

The Agency ceased to have financial responsibilty for the Rapid Response Fundwith effect from 1 April 2002. The administration of this fund transferred to theEmployment Service (Department of Work and Pensions).

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

included European funding, capital receipts from the disposal of assets and rentalincome from the Agency's Investment portolio.

Income£'000 %

Grant-in-Aid and transfer fromGovernment Grant reserve 264,355 87Other Grants received 9,607 3European Funding 3,589 1

Capital Receipts 7,062 2Revenue Receipts 12,344 4Other Income 4,276 2Speke Garston Developments Ltd. 3,882 1

Total 305,115 100

Expenditure

£'000 %

Business Development 57,993 19Regeneration 194,883 62Skills 7,414 2Infrastructure 12,384 4Investing in Image & Environment 4,927 2Administration 21,943 7Coalfields 1,477 1

Speke Garston Developments Ltd. 10,781 3Total 311,802 100

25

Future Developments

In April 2003 the Agency began to deliver the Allance for Productivity and Skills pilotproject that aims to raise the region's productivity and economic performance throughcloser integration of skils development and business support in alignment with theRegional Economic Strategy.

The Agency now has an enhanced role in the strategic development of tourism in theNorthwest and the Agency in conjunction with the Northwest Tourism Forum

published a Regional Tourism Strategy early in 2003.

Recognising the importance of an efficient transport infrastructure to the regionaleconomy, the Agency is working together with the North West Regional Assembly, toproduce an economically based regional transport vision.

The Agency completed the transition to Resource Budgets with effect from thefinancial year 2003/04.

Statement of the Agency's and Chief Executive's Responsibilties

Under section 14 of the Regional Development Agencies Act 1998 the Agency isrequired to prepare a statement of account for each financial year in the form and onthe basis determined by the Secretary of State, with the consent of Treasury. TheFinancial Statements are prepared on an accruals basis and must give a true and fairview of the Agency's state of affairs at the year end and of its income andexpenditure, total recognised gains and losses and cash flows for the financial year.

In preparing the Financial Statements the Agency is required to:. observe the Accounts Direction issued by the Secretary of State, including the

relevant accounting and disclosure requirements, and apply suitable accounting

policies on a consistent basis;. make judgements and estimates on a reasonable basis;. state whether applicable accounting standards have been followed, and disclose

and explain any material departures in the financial statements;. prepare the accounts on the going concern basis, unless it is inappropriate to

presume that the Agency will córitiriuèih operation.

The Accounting Officer for the Department of Trade and Industry has designated theChief Executive as the Accounting Officer of the Northwest Development Agency. Hisresponsibilities as Accounting Officer include responsibility for the propriety andregularity and value for money of the public finances, following guidance issued byGovernment; the keeping of proper records; and advising and informing the Board offinancial considerations. These requirements are set out in the "Non-DepartmentalPublic Bodies' Accounting Officer's Memorandum" issued by the Treasury andpublished in Government Accounting.

26

Board Members

Board Members are appointed by the Secretary of State. They include LocalAuthority, Trade Union, Community and Private Sector representatives. Theircorporate responsibilities are detailed in the Code of Best Practice for the Board ofthe NWDA, which is a public document available from the Agency's offices.

Bryan Gray MBE, DL, Chairman (Appointed 1 st April 2002)

Professor Sir Martin Harris CBE, DL, Deputy Chairman (Appointed December 2001)

Neville Chamberlain CBE (Appointed December 2001)

John Dunning CBE, JP (Appointed December 1998)

Clive Jeanes OBE (Appointed December 1998)

Robert Johnston (Appointed December 2002)

Or Pauleen Lane (Appointed December 2001 )

Cllr Richard Leese CBE (Appointed December 1998)

Alan Manning (Appointed December 1998)

Dennis Mendoros OBE (Appointed December 1998)

Cllr Marie Rimmer (Appointed December 2002)

Anil Ruia OBE (Appointed December 2001 )

Brenda Smith (Appointed December 2001)

Cllr Mike Storey CBE (Appointed December 2001)

Or Maureen Williams (AppointedDecember 2002)

Those members who left the Board in December 2002:

Cllr Mike Doyle JP

Felicity Goodey CBE, DL

Kath Reade

Brief biographies for the Board Members and details of their areas of responsibilitywithin the Agency, for 2002/03 are shown in the Annual Report section of thisdocument.

Board members are contracted to carry out two days work per month on behalf of theAgency. The Chairman is contracted for 2 days per week and the Deputy Chairman 1day per week.

27

The Agency maintains a Register of Board Members' Interests which is available onrequest by contacting the Director of Corporate Services at the Agency's offices atRenaissance House, Warrington. Members declare their interests to the Board in anytransactions involving the relevant organisations and withdraw from the meeting asappropriate so that they do not participate in any discussions or vote on any relatedmatters.

Appointment of Chief Executive

On 14 December 1998 Michael Shields was appointed as Chief Executive for a fixedterm of five years.

Employment of Disabled Persons

The Agency is committed to providing equal opportunities for all and will makereasonable adjustments to working arrangements to meet special needs. We willwork towards an environment and culture where everyone is encouraged andsupported to develop their full potential regardless of individual characteristics whichmay limit a person's opportunities in life.

Provision of information to and consultation with employees

The Agency is fully committed to effective and open communication and consultationwith its employees. This is achieved through a variety of means including a StaffConsultative Committee involving the Public and Commercial Services (peS) andProspect Trade Unions together with staff representatives; a Health and SafetyCommittee; and staff events to communicate key issues and receive feedback.

Better Payment Practice Code

The Agency is committed to the Better Payment Practice Code (previously the CBIPrompt Payment Code) and aims to pay all undisputed invoices either within 30 daysor the terms agreed with the supplier (minimum 95%).

In 2002/03 the Agency did not achieve this target paying 76% (2002: 84%) ofinvoices on time. The Agency is committed to achieving a high standard ofperformance and is continuing to seek improvement in payment timescales.

Financial Memorandum

The Secretary of State issued the Agency with a new Financial Memorandum settingout the financial framework under which the Agency should operate. The Agency hascomplied in all material respects with the terms of this memorandum during thecourse of 2002/03.

28

Statement on Internal Control

The Accounting Officer has responsibiliy for maintaining a sound system of internalcontrol that supports the achievement of the Northwest Development Agency's andthe group's policies aims and objectives whilst safeguarding the public funds andassets for which he is personally responsible in accordance with the responsibilitiesassigned to him in Government Accounting.

The system of internal control is designed to manage rather than eliminate the risk offailure to achieve policies aims and objectives; it can therefore only provide

reasonable and not absolute assurance of effectiveness.

The system of internal control is based on an ongoing process designed to identifythe principal risks to the achievement of the Agency's policies aims and objectives toevaluate the nature and extent of those risks to manage them efficiently, effectivelyand economically. It is planned that the procedures necessary to fully implementTreasury guidance will be in place in March 2004. This takes account of the timeneeded to fully embed the processes, which the Agency has agreed should beestablished.

In 2003 the Agency agreed its risk management strategy and policy, and madearrangements to review and update the corporate risk register. A further facilitatedrisk management workshop was held in June 2003, resulting in the updating of thecorporate risk register. It is planned to cascade risk awareness throughout theAgency through a series of facilitated workshops to identify and keep up to date, therecords of risks facing the organisation, during 2003/04.

In addition to the actions mentioned above, in the coming year the Agency plans to:. establish risk indicators,

. maintain and develop the risk register,

. arrange for reports from the Agency's Directors on internal control activities,and

. Submit reports on risk management to the Audit Committee and through the

chairman of the audit committee to the board, commencing October 2003

The Agency plans to recruit a Head of Risk Management and Assurance to lead thiswork in 2003.

The Agency has an Internal Audit Service which operates to standards defined in theGovernment Internal Audit ManuaL. They submit regular reports which include theHead of Internal Audit's independent opinion on the adequacy and effectiveness ofthe Agency's system of internal control together with recommendations forimprovement.

The Accounting Officer's review of the effectiveness of the system of internal controlis informed by the work of the internal auditors and the executive managers withinthe department who have responsibility for the development and maintenance of theinternal control framework and comments made by the external auditors in theirmanagement letter and other reports.

29

Statement on the Agency's Policy for Conserving energy, reducingwaste & minimising the Release of Greenhouse Gases

The Agency is committed to a sustainable future for the North West. Sustainabledevelopment is at the heart of the Regional Economic Strategy. The Agency supportsa range of programmes to enhance the environmental performance of businesssectors. It is recognised that reducing business overheads, through the provision ofinitiatives to provide environmental advice and support, wil contribute to improvingthe competitiveness and productivity of businesses in the region.

Through its financial support for Renewables Northwest and Envirolink, the Agency issignificantly strengthening the region's Renewable Energy and EnvironmentalTechnologies sectors. These programmes of work promote energy conservation,waste reduction and minimisation of greenhouse gas emissions in the region.

The Agency is committed to improving its own environmental performance. The firstannual environmental audit of Agency activities has been carried out. The audit willhelp us to build upon our current strengths and identify areas where improvementscan be made. The recommendations from the audit will be considered forimplementation in the coming year.

Chief Executive I Accounting Officer

Chairman

30

NORTH WEST DEVELOPMENT AGENCY 2002.03

THE REPORT OF THE COMPTROLLER AND AUDITOR GENERALTO THE HOUSES OF PARLIAMENT AND THE NORTHWEST

DEVELOPMENT AGENCY

I have audited the financial statements on pages 32 to 69 under the RegionalDevelopment Agencies Act 1998. These financial statements have been preparedunder the historical cost convention as modified by the revaluation of certain fixedassets and the accounting policies set out on pages 37 to 40.

Respective responsibilties of the Agency, the Chief Executive andAuditor

As described on page 25 the Northwest Development Agency and Chief Executiveare responsible for the preparation of the financial statements in accordance with theRegional Development Agencies Act 1998 and directions made thereunder by theSecretary of State, and for ensuring the regularity of financial transactions. TheNorthwest Development Agency and Chief Executive are also responsible for thepreparation of the other contents of the Annual Report. My responsibilities, asindependent auditor are established by statute and guided by the Auditing PracticesBoard and the auditing profession's ethical guidance.

i report my opinion as to whether the financial statements give a true and fair viewand are properly prepared in accordance with the Regional Development AgenciesAct 1998 and directions made thereunder, and whether in all material respects theexpenditure and income have been applied to the purposes intended by Parliamentand the financial transactions conform to the authorities which govern them. i alsoreport if, in my opinion, the Foreword is not consistent with the financial statements, ifthe Northwest Development Agency has not kept proper accounting records, or if ihave not received all the information and explanations i require for my audit.

i read the other information contained in the Annual Report and consider whether it isconsistent with the audited financial statements. i consider the implications for mycertificate if i become aware of any apparent misstatements or materialinconsistencies with the financial statements.

I review whether the statement on page 28 reflects the Northwest DevelopmentAgency's compliance with Treasury's guidance 'Corporate Governance: statement oninternal control'. i report if it does not meet the requirements specified by Treasury,or if the statement is misleading or inconsistent with other information i am aware offrom my audit of the financial statements.

The maintenance and integrity of the Agency's website is the responsibility of theAccounting Officer; the work carried out by the auditors does not involveconsideration of these matters and accordingly the auditors accept no responsibilityfor any changes that may have occurred to the Financial Statements since they wereinitially presented on the website.

Basis of audit opinion

i conducted my audit in accordance with United Kingdom Auditing Standards issuedby the Auditing Practices Board. An audit includes examination, on a test basis, ofevidence relevant to the amounts, disclosures and regularity of financial transactionsincluded in the financial statements. It also includes an assessment of the significantestimates and judgements made by the Agency and the Chief Executive in thepreparation of the financial statements, and of whether the accounting policies areappropriate to the Agency's circumstances, consistently applied and adequatelydisclosed.

31

I planned and performed my audit so as to obtain all the information and explanationswhich I considered necessary in order to provide me with sufficient evidence to givereasonable assurance that the financial statements are free from materialmisstatement, whether caused by error, or by fraud or other irregularity and that, inall material respects, the expenditure and income have been applied to the purposesintended by Parliament and the financial transactions conform to the authoritieswhich govern them. In forming my opinion I have also evaluated the overalladequacy of the presentation of information in the financial statements.

Opinion

In my opinion:

. the financial statements give a true and fair view of the state of affairs of theNorthwest Development Agency and the Group at 31 March 2003 and of thedeficit, total recognised gains and losses and cash flows for the period then endedand have been properly prepared in accordance with the Regional DevelopmentAgencies Act 1998 and directions made thereunder; and

. in all material respects the expenditure and income have been applied to thepurposes intended by Parliament and the financial transactions conform to theauthorities which govern them.

. I have no observations to make on these financial statements.

John Bourn

Comptroller and Auditor GeneralJuly 2003

National Audit Office

157-197 Buckingham Palace RoadVictoria

London SW1W 9SP

32

GROUP INCOME AND EXPENDITURE ACCOUNT FOR THE YEAR TO 31 MARCH 2003

Notes 2003 2002

£'000 £'000IncomeGrant-in-Aid 2 232,526 237,610Transfer from government grant reserve 19A 31,829 14,701Coalfield and other government grants 2 9,607 1,410Clawback of grant and contributions 3,555 2,226European funding 4 3,678 4,643Proceeds from disposal of Development assets 4,631 2,755Proceeds from disposal of Investment assets 6,106 5,260Proceeds from disposal of Operating assets 10Rents and maintenance charges 12,378 10,448Other income 5 795 1,992TOTAL INCOME 305,115 281,045

ExpenditureBook value of investment assets sold 12 5,339 5,138Book value of development assets sold 15 3,481 3,024Book value of operating assets sold 11Bad debts and movements in provision for badand doubtful debts 37 547Development assets written down 15 31,468 4,301Investment assets written down 12 2,167Environmental Provisions 18 300 (100)Salaries and wages 7 10,784 8,653Other administrative costs 8 33,347 15,192Non grant programme expenditure 2,142 186Grants paid for programme expenditure 224,904 237,028Non grant coalfield expenditure 970TOTAL EXPENDITURE 311,802 277,106

Operating (Deficit) / Surplus (6,687) 3,939

Interest receivable 6 846 494Notional cost of capital 9 (8,966) (8,221 )

(Deficit) for the period on ordinary activities (14,807) (3,788)

Taxation 10 (3,392) (106)

(Deficit) for the period after tax (18,199) (3,894)

Reversal of notional cost of capital 8,966 8,221

(Deficit) / Surplus for the period carried forward (9,233) 4,327

All activities are from continuing operations.

34

GROUP BALANCE SHEET AS AT 31 MARCH 2003

Notes 2003 2002£'000 £'000

FIXED ASSETSTangible operating assets 11 3,733 3,417I nvestment assets 12 82,498 85,098Investments 13 1,057

87,288 88,515

CURRENT ASSETSStock of development assets 15 67,330 60,911Debtors 16 32,835 18,907Cash at bank and in hand 23 10,724 5,332

110,889 85,150CREDITORS: Amounts fallingdue within one year 17 (43,879) (23,646)

NET CURRENT ASSETS 67,010 61,504

PROVISIONS FOR LIABILITIES AND 18 (3,248) (834)CHARGES

TOTAL ASSETS LESS TOTAL LIABILITIES 151,050 149,185

RESERVESIncome and Expenditure Reserve 20 4,824 13,828Government Grant Reserve 19A 146,226 135,357Other Reserves 21Loan Stock 22

151,050 149,185

APPROVED BY THE BOARD ON 11 TH JUL Y 2003.

Chief Executive/Accounting Officer Chairman

The notes on pages 37 to 69 form part of these accounts

33

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFOR THE YEAR ENDED 31 MARCH 2003

2003 2002£'000 £'000

(Deficit) / Surplus for period carried forward (9,233) 4,327

Revaluation on investment assets 463Revaluation on development assets

Grant in Aid receivable not released to theIncome and Expenditure Account 42,235 33,045

Total Gains 33,465 37,372

35

BALANCE SHEET AS AT 31 MARCH 2003

Notes 2003 2002£'000 £'000

FIXED ASSETSTangible operating assets 11 3,730 3,407Investment assets 12 82,498 85,098Investment 13 1,057

87,285 88,505

CURRENT ASSETSStock of development assets 15 58,011 45,622Debtors 16 38,426 25,095Cash at bank and in hand 10,096 5,326

106,533 76,043CREDITORS: Amounts fallingdue within one year 17 (42,252) (22,688)

NET CURRENT ASSETS 64,281 53,355

PROVISIONS FOR LIABILITIES AND CHARGE~ 18 (3,248) (834)

TOTAL ASSETS LESS TOTAL LIABILITIES 148,318 141,026

RESERVESIncome and Expenditure Reserve 20 (2,503) 1,074Government Grant Reserve 19B 150,821 139,952Other Reserves 21

148,318 141,026

APPROVED BY THE BOARD ON 11 TH JULY 2003

Chief Executive/Accounting Officer Chairman

The notes on pages 37 to 69 form part of these accounts

36

GROUP CASHFLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2003

Reconciliation of Operating Surplus to net cash (outflow) from Operating Activities

OPERATING ACTIVITIES

Operating (Deficit) / Surplus

Transfer from Government Grant Reserve

Depreciation

Proceeds from the disposal of Investment Assets

Book Value of Investment Assets sold

Write Down of Investment Assets

Additions to Stock of Development Assets

Book value of Development Assets sold

Write Down of Development Assets

Proceeds from the disposal of Operating Assets

(Increase) in Debtors

Increase in Creditors and Provisions

Environmental Liability provision increase/( decrease)

Subsidiary Undertaking

Net Cash (Outflow) from operating activities

CASHFLOW STATEMENT

Returns on Investments and Servicing offinanceInterest Received

TaxationUK Corporation Tax paid

Capital Expenditure and Financial InvestmentPurchase of Fixed Operating and Investment assets

Proceeds on disposal of Fixed Operating and Investment assets

Cash (outflow) before financing

Financing for Investment, Development and Operating Assets

Increase in Cash

2003£'000

(6,687)

(31,829)

817

(6,106)

5,339

2002£'000

3,939

(14,701)

334

(5,260)

5,138

2,167

(34,067)

3,024

4,301

(41,368)

3,481

31,468

(10)

(14,916)

19,976

300

229

(39,306)

(9,707)

16,424

(100)

(28,508)

846 494

(33) (3,914)

(4,466) (3,710)

6,116 5,260

(36,843) (30,378)

42,235 33,045

5,392 2,667

37

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2003

1 ACCOUNTING POLICIES

(1) Basis of Accounting

The Financial Statements of the Northwest Development Agency have beenprepared in a form directed by the Secretary of State for Trade and Industry,with the approval of H M Treasury, in accordance with the RegionalDevelopment Agencies Act 1998. The financial statements have beenprepared as set out in Treasury guidance under the modified historical costbasis as explained in the sub-paragraphs below and in accordance withapplicable Accounting Standards. Compliance with SSAP 19 "Accounting forInvestment Properties" requires departure from the requirements of theCompanies Act 1985 relating to depreciation and an explanation of thedeparture is given in note 1 (3) below.

(2) Basis of Consolidation

No separate income and expenditure account is presented for the Agency asprovided by Section 230 of the Companies Act 1985.

The consolidated Financial Statements incorporate the Financial Statementsof the Agency and its subsidiary undertaking Speke Garston DevelopmentsLimited.

(3) Fixed assets - Investment assets

The portolio of industrial and commercial investment properties held at anyone time is treated in such a way that surpluses and deficits on revaluation ofindustrial and commercial properties are netted off. Any overall write-down ofthese properties to open market value, and subsequent adjustments thereto,are accounted for annually and separately identified in the income andexpenditure account. Any overall surplus on revaluation of these properties toopen market value, and subsequent adjustments thereto, are credited to thegovernment grant reserve after eliminating the overall accumulated unrealiseddeficit, as originally charged, by revaluation adjustment, to the Income andExpenditure Account.

Valuations are carried out in accordance with best practice as contained in theStatement of Asset Valuation Practice and Guidance Notes (4th Edition)published by the Royal Institute of Chartered Surveyors.

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

In accordance with SSAP 19, no depreciation is provided in respect ofinvestment properties. This departure from the requirement of the CompaniesAct 1985 for all properties to be depreciated is, in the opinion of the Board,necessary for the Financial Statements to give a true and fair view inaccordance with applicable accounting standards as properties are included inthe Financial Statements at their open market value.

38

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2003 (CONTINUED)

1 ACCOUNTING POLICIES (CONTINUED)

(3) Fixed assets (continued)

Depreciation is only one of the many factors reflected in the annual valuationof the properties and the amount attributed to this factor by the valuers cannotreasonably be separately quantified.

Acquisitions and disposals of land and buildings are accounted for on the dateof legal completion.

(4) Fixed Assets - Other Tangible Assets

Tangible Fixed Assets are valued at depreciated replacement cost.

(5) Development Assets

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

Acquisitions and disposals of development assets are accounted for on thedate of legal completion.

(6) Depreciation

Depreciation is provided to write off the replacement cost of tangible fixedassets over their anticipated useful lives on a straight line basis at thefollowing annual rates:

Owned propertyLeasehold buildings with less than 25 years to runOffice furniture, fittings and equipmentComputer equipment

50 yearsPeriod of lease5 years3 years

(7) Investments and Long Term Loans

Investments and loans are shown net of provision for amounts considereddoubtful and of write-offs for amounts considered irrecoverable. Provision hasbeen made for all loans where recovery appears doubtfuL. No loan is writtenoff until the impossibility of recovery is beyond doubt. Approval from the DTI isobtained for any write-off in excess of £50,000.

39



(7) Investments and Loans (continued)

Partnership workspace schemes, the Agency's investment with partners,mainly local authorities, to provide rural workspace has been disclosed in theBalance Sheet at a valuation based on the present value of estimated futurerental income. Expenditure on these projects is written off in the year ofspend.

(8) Pension Costs

Certain of the employees of The Northwest Development Agency participatein the Principal Civil Service Pension Scheme (PCSPS), the EnglishPartnerships Pension Scheme (EPPS) and individual defined contributionpension plans. The PCSPS and EPPS are defined benefit schemes. TheNorthwest Development Agency recognises the expected cost of providingpensions on a systematic and rational basis over the period during which itbenefits from employee's services by payment to the scheme of amountscalculated on an accruing basis. Liability for payment of future benefits is acharge on the scheme

(9) Government Grants

Northwest Development Agency's activities are funded primarily by Grant-in-Aid provided by the Department of Trade and Industry for specified types ofexpenditure. Government Grants receivable of a revenue nature are creditedto the Income and Expenditure Account in the year to which they relate.Government Grants in respect of capital expenditure are credited to theGovernment Grant Reserve and released to the Income and ExpenditureAccount either, over the expected useful life of the asset, for assets that aredepreciated or, upon disposal or loss in value, for assets that are notdepreciated.

Grant-in-Aid released to the Income and Expenditure account includesamounts attributable to expense accruals for which grant will be receivedduring the year 2003/2004 to finance payment.

(10) Deferred Taxation

Full provision has been made for deferred tax assets and liabilities arisingfrom timing differences between the recognition of gains and losses in thefinancial statement and their recognition in the tax computation.

(11) Foreign Currency Transactions

Transactions in foreign currencies are recorded in sterling at the ratesprevailing at the Balance Sheet date. Resulting exchange gains and lossesare taken to the Income and Expenditure Account.

40



(12) Leases

Operating lease rentals are charged to the Income and Expenditure Accountover the period of the lease.

There are no finance leases.

41


2 ANALYSIS OF TOTAL GRANT UTILISED

In 2002-03, the Agency was funded by grant-in-aid from the Department of Tradeand Industry.

2003£'000

Grant-in-aid received from DETR

Grant-in-aid received from DTI

Coalfield grant received

EU grants received

Other grants received

Grants applied to inherited liabilities

Opening 2001-2002 net grant debtor

Closing 2001-2002 net grant debtor

Opening 2002-2003 net grant debtor

Closing 2002-2003 net grant debtor

265,000

20

3,445

9,980

(1,355)

(2,841 )

13,708

2002£'000

6,312

262,797

1,027

4,671

385

(1,297)2,841

Net Grant receivable

Total relevant expenditure

Less Non-grant income

Total grant utilsed

Total Grant applied to operational asset additions

Total Grant applied to investment asset additions

Total Grant applied to development asset additions

Total Grant applied to investment additions

Grant in aid credited to Income & Expenditure Account

Coalfield grant credited to Income & Expenditure Account

EU grants credited to Income & Expenditure Account

Other grants credited to Income & Expenditure Account

Total grant utilsed

287,957

312,387

(24,430)287,957

1,133

2,276

37,769

1,057

232,526

(378)3,589

9,985

287,957

276,736

297,548

(20,812)

276,736

1,997

2,133

28,915

237,610

953

4,671

457

276,736

42


3 ANALYSIS OF INCOME AND EXPENDITURE BY KEY DRIVER

Business DevelopmentRegenerationSkillsInfrastructureInvesting in Image & EnvironmentAdministrationCoalfieldsSpeke Garston Developments Ltd

Total Incomerecorded in

Income &Expenditure

Account2003£000

57,993194,883

7,41412,3844,927

22,1551,4773,882

Total Expenditurerecorded in

Income &Expenditure

Account2003£000

57,993194,883

7,41412,3844,927

21,9431,477

10,781

Grant applied tocapital additions

recorded inGovernment

Grant Reserve2003£0001,424

35,0812

4,5364

1,061127

Total 42,235305,115 311,802

4 EUROPEAN FUNDING

2003 2002£'000 £'000

European Regional Development Fund- received for coalfields 40 17- Northwest Development Agency 3,549 4,654- Speke Garston Developments Ltd 89 (28)

3,678 4,643

5 OTHER INCOME

2003 2002£'000 £'000

Inward Investment 30Speke Garston Developments Limited 72 1,209Miscellaneous Income 723 254Partner Contributions 499

795 1,992

6 INTEREST RECEIVABLE

2003 2002£'000 £'000

Corporation Tax Interest 76Bank deposit 741 477Rural loan interest 29 17

846 494

43


7 SALARIES AND WAGES

2003 2002£'000 £'000

7 (a)Board MembersBoard members salaries 168 147Pension costs 9 8Social Security Costs 11 9

188 164

Staff

Salaries and wages inc. overtime 8,190 6,520Pension Costs 1,200 784Social Security costs 594 535

9,984 7,839

Agency Staff 422 494Seconded staff salary costs 190 156

612 650

Total Salaries & Wages 10,784 8,653

44


7 (b) Emoluments of Board Members

The emoluments of Board Members were:

Name Period of Salary Pension Total TotalAppointment 2003 2002

From To £ £ £ £

Bryan Gray 01/04/02 - 31/03/05 47,800 8,842 56,642Lord Thomas ofMacclesfield 14/12/98 - 31/03/02 - 46,634Mike Doyle * 14/12/98 - 13/12/01

14/12/01 - 13/12/02 11,406 - 11,406 14,838Professor Sir MartinHarris 14/12/01 - 13/12/04 14,871 - 14,871 2,197

John Dunning 14/12/98 - 13/12/01 7,604 7,604 7,41914/12/01 - 13/12/04

Felicity Goodey * 14/12/98 - 13/12/01 5,703 5,703 7,41914/12/01 - 13/12/02

Clive Jeanes 14/12/98 - 13/12/01 7,604 7,604 7,41914/12/01 - 13/12/03

Richard Leese 14/12/98 - 13/12/01 7,604 7,604 7,41914/12/01 -13/12/03

Alan Manning 14/12/98 -13/12/01 7,604 7,604 7,41914/12/01 -13/12/03

Dennis Mendoros 14/12/98 - 13/12/01 7,604 7,604 7,41914/12/01 -13/12/04

Neville Chamberlain 14/12/01 -13/12/04 7,604 7,604 2,197Anil Kumar Ruia 14/12/01 -13/12/04 7,604 7,604 2,197Brenda Smith 14/12/01 -13/12/04 7,604 7,604 2,197Mike Storey 14/12/01 - 13/12/04 7,604 7,604 2,197Dr Pauleen Lane 14/12/01 - 13/12/04 7,604 7,604 2,197Marie Rimmer 14/12/02 - 13/12/05 2,252 2,252Maureen Williams 14/12/02 - 13/12/05 2,252 2,252Robert Johnston 14/12/02 - 13/12/05 2,252 2,252Kath Reade * 14/12/98 - 13/12/01 5,703 5,703 7,419

14/12/01 -13/12/02 7,419Fred Ridley 14/12/98 -13/12/01 5,203Judy Robinson 14/12/98 - 13/12/01 5,203James Ross 14/12/98 - 13/12/01 5,203Maggie Chadwick 14/12/98 - 13/12/01 5,203

* Retired 13 December 2002

Name Age Real increase inpension at 60

Total accruedpension at 60

at 31/3/03£

Total accruedpension at 60 at

31/3/02££

Bryan Gray 49 598 598

45


The net salaries of Professor Sir Martin Harris, Anil Kumar Ruia and Dr PauleenLane have been paid directly to their principal employer, at their request. As aconsequence they receive no personal benefit from their remuneration as boardmembers.

On 1 st April 2002 Bryan Gray was appointed to the position of Chairman.

Board members are contracted to carry out two days work per month on behalf of theAgency. The Chairman is contracted for 2 days per week and the Deputy Chairmanis contracted for 1 day per week. No Board Members are eligible for pensioncontributions, performance related pay or any other taxable benefit as a result ofemployment with the Agency, with the exception of the Chairman, who is a memberof the Principal Civil Service Pension Scheme.

7 (c) Emoluments of Chief Executive and the most senior managers

Name Age Salaryfor

relevantperiod

£

Bonus Benefits PensionContributions

£ £ £Michael Shields, CBEChief ExecutiveAppointed 14-12-98 60 93,373 9,410 899 17,537

Steve AshcroftDirector of CorporateServicesAppointed 01-09-99

53 53,545 4,118 898 8,969

John Burrows, OBEDirector of Business

~DevelopmentAppointed 01-04-99 57 76,826 5,909 4,716 14,429

Dr Baron IsherwoodDirector ofRegenerationAppointed 01-10-99

58 74,962 5,766 1,796 14,079

Peter MearnsDirector of MarketingAppointed 16-08-99 4,118 4,769 8,96952 49,919

Geoff ParkerDirector of FinanceAppointed 19-07-99 49 74,962 5,766 4,157 14,079

Dr Peter WhiteDirector of StrategyAppointed 01-08-99 53 74,962 5,766 5,751 14,079

2003Total

2002Total

£ £

121,219 101,301

67,530 57,934

101,880 88,083

96,603 84,086

67,775 62,749

98,964 85,122

100,558 84,230

46


7 (c) Emoluments of Chief Executive and the most senior managers

Name Age Real Total Totalincrease in accrued accruedpension at pension at pension at

60 60 60 atat 31/03/03 31/3/02

£ £ £Michael Shields, CBEChief ExecutiveAppointed 14-12-98 60 1,072 4,960 3,823

Steve AshcroftDirector Corporate ServicesAppointed 01-09-99 53 668 2,424 1,727

John Burrows, OBEDirector of Business Development Private Money PurchaseAppointed 01-04-99 57 Defined Contribution Scheme

Dr Baron IshwerwoodDirector of RegenerationAppointed 01-10-99 58 548 25,807 24,837

Peter MearnsDirector of MarketingAppointed 16-08-99 52 501 2,285 1,754

Geoff Parker *Director of FinanceAppointed 19-07-99 49 20,317 22,892 2,531

Dr Peter WhiteDirector of Strategy

"AppOinted 01':08-99 53 956 3,439 2,441

* A transfer into the Principal Civil Service Classic Pension Scheme representing 20.7years service was made on 25 January 2002.

Pension benefits are provided through the Principal Civil Service Classic PensionScheme. This is a statutory scheme that provides benefits on a final salary basis at anormal retirement age of 60. Benefits accrue at the rate of 1/80th of pensionablesalary for each year of service. In addition a lump sum equivalent to 3 years' pensionis payable on retirement. Members pay contributions of 1 1/2% of pensionableearnings. Pensions increase in payment in line with the Retail Price Index. Ondeath, pensions are payable to the surviving spouse at a rate of half the member'spension. On death in service, the scheme pays a lump sum benefit of twicepensionable pay and also provides a service enhancement on computing thespouse's pension. The enhancement depends on length of service and cannotexceed 10 years.

47


The Chief Executive and Senior Management have given their consent to show theirpension benefit details, but the pensions benefit details of John Burrows are notavailable to the Agency at this time.

Medical retirement is possible in the event of serious ill health. In this case pensionsare brought into payment immediately without actuarial reduction and with serviceenhanced as for widow( er) pensions.

Benefits include cars.

Performance pay for the Chief Executive is determined by the Board on therecommendation of the Remuneration Committee. Performance is measured againstseven separately weighted targets determined by the Board and agreed by theSecretary of State for Trade and Industry and the amount of the performance awardcan be up to a maximum of 10% of salary. In 2002/03 targets related to ProgrammeDelivery, the Review of the Regional Economic Strategy and the introduction of theSingle Financial Framework.

Performance pay of the senior management team is determined by the ChiefExecutive on advice from the Remuneration Committee. Performance is measuredagainst detailed annual targets set individually for each employee by the ChiefExecutive and the amount of the performance award can be up to 10% of salary.

SALARIES AND WAGES

7 (d) Staffing Numbers

The average number of staff employed by the Agency during the year (including allagency and seconded staff) was 291 :

2003 2002

Chief Executive's Office 6 7

Corporate Services 11 8

Business Development 67 53

Regeneration 107 96

Marketing 13 14

Finance 39 44

Strategy (formerly Policy & Intelligence) 37 30

Overseas 3 3

Speke Garston Developments Limited 8 8

Total 291 263

48


7 (e) Pension Arrangements

The Agency has a number of pension schemes in operation. The principal schemesare of the contributory defined benefit type.

Employees joining after 1 October 2002 could opt to open a partnership pensionaccount, a stakeholder pension with an employer contribution. The Agency currentlyhas no employees in this type of pension scheme.

(i) Principal Civil Service Pension Scheme (PCSPS)

The PCSPS is an unfunded multi-employer defined benefit scheme but NorthwestDevelopment Agency is unable to identify its share of the underlying assets andliabilities. A full actuarial valuation was carried out at 31 March 1999. Details can befound in the resource accounts of the Cabinet Office; Civil Superannuation(ww. civilservice-pensio ns. gov. u k).

For 2002-03, employer's contributions of £948,541 were payable to thePCSPS (2001-02: £623,890 ) at one of four rates in the range 12 to 18.5per cent of pensionable pay, based on salary bands. Rates wil remain thesame next year, subject to revalorisation of the salary bands. Employer contributionsare to be reviewed every four years following a full scheme valuation by theGovernment Actuary. The contribution rates reflect benefits as they are accrued, notwhen the costs are actually incurred, and reflect past experience of the scheme.

Pension benefits are provided through the Civil Service pension arrangements.

From 1 October 2002, civil servants may be in one of three statutory based "finalsalary" defined benefit schemes (classic, premium, and classic plus). Newentrants after 1 October 2002 may choose between membership of premium orjoining a good quality "money purchase" stakeholder based arrangement with asignificant employer contribution (partnership pension account).

Classic Scheme

Benefits accrue at the rate of 1/80th of pensionable salary for each year of service. Inaddition, a lump sum equivalent to three years' pension is payable on retirement.Members pay contributions of 1.5 per cent of pensionable earnings. On death,pensions are payable to the surviving spouse at a rate of half the member's pension.On death in service, the scheme pays a lump sum benefit of twice pensionable payand also provides a service enhancement on computing the spouse's pension. Theenhancement depends on length of service and cannot exceed 10 years. Medicalretirement is possible in the event of serious ill health. In this case, pensions arebrought into payment immediately without actuarial reduction and with serviceenhanced as for widow( er) pensions.

49


Premium Scheme

Benefits accrue at the rate of 1/60th of final pensionable earnings for each year ofservice. Unlike classic, there is no automatic lump sum, but members may commutesome of their pension to provide a lump sum up to a maximum of 3/80ths of finalpensionable earnings for each year of service or 2.25 times pension if greater (thecommutation rate is £12 of lump sum for each £1 of pension given up). For the

purposes of pension disclosure the tables assume maximum commutation.Members pay contributions of 3.5 per cent of pensionable earnings. On death,pensions are payable to the surviving spouse or eligible partner at a rate of 3/8ths themember's pension (before any commutation). On death in service, the scheme paysa lump-sum benefit of three times pensionable earnings and also provides a serviceenhancement on computing the spouse's pension. The enhancement depends onlength of service and cannot exceed 10 years. Medical retirement is possible in theevent of serious ill health. In this case, pensions are brought into payment

immediately without actuarial reduction. Where the member's ill health is such that itpermanently prevents them undertaking any gainful employment, service isenhanced to what they would have accrued at age 60.

Classic Plus Scheme

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

Pensions payable under classic, premium, and classic plus are increased in linewith the Retail Prices Index.

(H) English Partnerships Pension Scheme

The EPPS is a multi-employer defined benefit scheme but the NorthwestDevelopment Agency is unable to identify its share of underlying net assets andliabiliies. A full actuarial valuation was carried out at 31 March 1999 and moredetails can be found in the separate scheme statement of the EPPS. For 2002-2003,normal employer contributions of £245,966 were payable to the EPPS (2001-2002:£108,948) at the rate of 9 per cent between 1 April 2002 and 31 December 2002 and14 ~ per cent between 1 January 2003 and 31 March 2003 (2001-2002: 9%) of

pensionable salary. It has been agreed that contributions will be reviewed on anannual basis following a scheme valuation by the scheme actuary. The contributionrates reflect benefits as they are accrued, not when the costs are actually incurred,and they reflect past experience of the scheme. At the balance sheet date therewere no outstanding or prepaid contributions to the scheme.

The accounts of the English Partnerships Pension Scheme are available from theSecretary, at St George's House, Kingsway, Team Valley, Gateshead, NE11 ONA.All employees in the scheme are issued with a summary of the accounts.

50


(m) The Greater Manchester Pension Fund

Contributions of £nil (2001 - 2002: £2,093) were paid to the Greater ManchesterPension Fund. The Greater Manchester Pension Fund is a multi-employer definedbenefit scheme, but the Northwest Development Agency is unable to identify its

share of underlying net assets and liabilities. A full actuarial valuation was carriedout at 31 March 2001 and more details can be found in the separate schemestatement of the Greater Manchester Pension Fund.

(iv) Other Schemes

There are three minority schemes covering 3.8% of the Agency's staff, of the definedcontribution type held in independently administered funds. Contributions of £nil(2002: £31,654) were paid to Inward Group Money Purchase Plan, Scottsh MutualAssurance Plc Group Personal Pension Plan and CGU Life Personal Pension Plan.

The Merseyside Pension Fund covers 2.7% of the Agency's staff and is a definedbenefit scheme. The rate for 2002/03 was 11 % of pensionable salary. Contributionsof £14,355 (2002: £26,114) were paid.

The Merseyside Pension Fund is a multi-employer defined benefit scheme but theNorthwest Development agency is unable to identify its share of underlying netassets and liabilities. A full actuarial valuation was carried out at 31 March 2001 andmore details can be found in the separate scheme statement of the MerseysidePension Fund.

7 (t) Seconded Staff

Staff were seconded from the following organisations to the Agency during the accountingperiod.

2003 2002Organisation No. of Cost No. of Cost

staff £'000 staff £'000

Chamber Business Enterprise 1 41 1 20Manchester City Council 1 27Greater Merseyside Enterprises 1 45South Wirral Health Authority 1 42 1 43Cumbria Tourist Board 1 24Pricewaterhouse Coopers 1 11 1 15Liverpool City Council 1 20Defence Science & Technology Laboratory 1 19North West Chemical Initiative 1 7Eden Biopharm 1 32Total 6 190 7 156

-~.

51

NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 31 MARCH 2003 (CONTINUED),

8 OTHER ADMINISTRATION COSTS

2003 2002£'000 £'000

Professional costs 14,057 3,158Marketing and PR 4,872 2,874Estate Management 4,471 2,015Office costs 4,441 3,192Operating lease rentals 1,171 927Other staff costs 1,157 434IT and communication 1,035 1,190Travel & Subsistence 889 664Depreciation 817 334Contributions to Joint Ventures 356 334Auditors' remuneration 81 70

33,347 15,192

The increase in professional costs between 2002 and 2003 is largely due to projectrelated activity comprising fee expenditure on major projects and the cost of deliveryof some programme related activity through contractors.

Marketing and PR costs reflect the Agency's increasing investment in the image ofthe region particularly around the Commonwealth Games and Tourism activity.Estates Management costs have risen as the Agency has added significantly to itsportolio of development assets.

Other staff costs reflect increased recruitment costs in 2003.

9 NOTIONAL COST OF CAPITAL

When calculating the surplus or deficit for the year, the Agency is required to includeas expenditure, a notional cost of capital, to the extent that there is no real charge forthis. This has been calculated as 6% of the average of total assets less totalliabiliies. After the surplus or deficit for the year there is an entry reversing thisamount.

10 TAXATION

Corporation tax on profits for the year at 30%Under provision in 2001-02Deferred tax provision

2003 2002£'000 £'000

386634

2,3723,392

106106

52


11 TANGIBLE OPERATING ASSETS

Group AgencyProperties Equipment, Total Properties Equipment, Totaloccupied fixtures and occupied fixtures

by the motor by the and motorAgency vehicles Agency vehicles

Cost or £'000 £'000 £'000 £'000 £'000 £'000valuation

At 1 April 2002 1,108 3,146 4,254 1,108 3,116 4,224Additions in year 1,133 1,133 1,133 1,133Disposals in year (60) (60) (60) (60)

At 31 March 2003 1,108 4,219 5,327 1,108 4,189 5,297

DepreciationAt 1 April 2002 66 771 837 66 751 817Depreciation inyear 22 795 817 22 788 810Disposals in year (60) (60) (60) (60)

At 31 March2003 88 1,506 1,594 88 1,479 1,567

Net Book Value31 March 2003 1,020 2,713 3,733 1,020 2,710 3,730

Net Book Value31 March 2002 1,042 2,375 3,417 1,042 2,365 3,407

The Net Book Value of tangible operating assets does not differ materially from thedepreciated replacement cost of the assets.

53


12 INVESTMENT ASSETS

Group Agency2003 2002 2003 2002£'000 £'000 £'000 £'000

At 1 April 2002 85,098 90,270 85,098 90,270Additions in year 2,276 1,702 2,276 1,702Transfer from Properties

occupied by Agency 431 431

87,374 92,403 87,374 92,403

Disposals (5,339) (5,138) (5,339) (5,138)Surplus/(Deficit) on Revaluation 463 (2,167) 463 (2,167)

Valuation at 31 March 2003 82,498 85,098 82,498 85,098

13 FIXED ASSET INVESTMENTS

54


14 SUBSIDIARY UNDERTAKINGS

Group Agency

£'000 £'000Loan1 April 2002 5,825

5,825ProvisionAt April 2002

31 March 2003

31 March 2002

Loan Stock of £5,825,000 was issued on 10 July 1996. It is unsecured and nointerest is receivable unless written notice is issued from either stockholder with theother's agreement.

On 1 April 2003, the business, assets and liabilties of Speke Garston DevelopmentsLimited were transferred to the Agency (Note 28).

Under the terms of this agreement, Speke Garston Developments Limited haveagreed to redeem the loan stock in consideration for the payment of the sum of £1 tothe Agency (if demanded). No notice has been issued to date.

The amount due to the minority shareholder was written down in full in 2000/2001(Note 22).

55


14 SUBSIDIARY UNDERTAKINGS (CONTINUED)

Name of UndertakingBusiness

Interest Class of Shares Nature of

Speke Garston Developments Ltd 80.1 % Ordinary Shares Development of Speke10p Garston, Liverpool

The Estuary Management Company 80.1 %Limited (A subsidiary of Speke GarstonDevelopments Limited)(Limited by guarantee).

Provision of services atthe Estuary CommercePark

On 1 April 2003, the Agency acquired the remaining interests in both Speke GarstonDevelopments Limited and The Estuary Management Company Limited (Note 28).

The total assets less total liabilities and financial results of The Estuary ManagementCompany Limited are not material to the Group.

Key Financial Results of The Estuary Management Company Limited

2003£'000

2002£'000

Loss for the year after taxation

Reserves 5 5

Balances between The Estuary Management Company Limited and the rest of theGroup

2003 2002£'000 £'000

Amounts due to Speke Garston Developments Limited 125 19

Amounts due to Northwest Development Agency 40

Balances due to the Northwest Development Agency are included within otherdebtors (Note 16).

56


14 SUBSIDIARY UNDERTAKINGS (CONTINUED)

ASSOCIATED UNDERTAKINGS

Group£'000

Agency£'000

Share of net assets

1 April 2002 528 528

Provision

At 1 April 2002 (528) (528)

Share of net assets at 31 March 2003

Share of net assets at 31 March 2002

The investment in Maryport Development Limited was provided for in full in1999/2000 to reflect Northwest Development Agency's intention to withdraw from thisinvestment which is now planned on 31st March 2004.

ASSOCIATES

Name of undertaking Nature of Business Interest

New East Manchester Limited Regeneration of East 33%(Company Limited by Guarantee) ManchesterLiverpool Vision Limited Regeneration of Liverpool 33%(Company Limited by Guarantee)

Renewables Northwest Limited Development of Initiatives for 33%(Company Limited by Guarantee) renewable energy

The total assets, total liabilities and financial results of New East Manchester Limitedare not material to the Agency or the group.

57


The Memorandum of Association of the above companies excluding New EastManchester Limited provides that the income and property of the company shall notbe available for distribution by way of dividend or in any other way that amounts to adistribution of surplus. If the companies are wound up or dissolved, any remainingproperty after all its debts and liabilities have been satisfied will be transferred tocompanies or institutions having similar objects to the members. As a result of theserestrictions, the Agency has not accounted for any share of the financial results, totalassets or total liabilities of the company at the year end.

At 31 March 2003, £303,723 was due to New East Manchester Limited, £193,792 toLiverpool Vision Limited and £nil to Renewables Northwest Limited. Amounts due toassociates are included within trade creditors (note 17).

In 2001-2002 interests in New East Manchester Limited and Liverpool Vision Limitedwere disclosed as Joint Venture arrangements. These interests have been reclassifiedas associates during the current year.

58


15 DEVELOPMENT ASSETS

Group Agency2003 2002 2003 2002£'000 £'000 £'000 £'000

At 1 April 2002 60,911 25,765 45,622 16,165Additions in year 41,368 34,067 37,769 28,915Transfer from English 6,845 6,845PartnershipsSurplus on revaluation for the 1,225yearFair Value Adjustment - Assetstransferred from English 334 334Partnerships

102,279 68,236 83,391 52,259

Amounts written down (31,468) (4,301 ) (24,818) (4,301 )Disposals (3,481 ) (3,024) (562) (2,336)

Valuation at 31 March 2003 67,330 60,911 58,011 45,622

Note: The fair value adjustment relates to the assets transferred from EnglishPartnerships at historical cost being adjusted to reflect open market value.

59


16 DEBTORS

Group Agency2003 2002 2003 2002£'000 £'000 £'000 £'000

Amounts receivable within oneyear:

Trade debtors 7,889 4,525 7,747 4,350Other debtors 6,666 5,481 6,262 5,481Value Added Tax 1,001 2,080 726 1,533Grant receivable in 2003/04 forexpenditure incurred in 2002/03 13,789 2,801 13,789 2,801European Regional DevelopmentFund 145 145Other grants 77 72 77 72Rural Loans 74 98 74 98Prepayments 2,055 1,724 2,055 534Corporation Tax 1,139 2,126 1,139 2,126Amounts due from subsidiaryUndertaking 6,412

32,835 18,907 38,426 16,995

Amounts fallng due after morethan one year:

Amount due from subsidiaryundertaking 8,100

32,835 18,907 38,426 25,095

60


17 CREDITORS: Amounts fallng due within one year

Group Agency2003 2002 2003 2002£'000 £'000 £'000 £'000

Trade creditors 31,432 13,057 31,375 12,099Other taxes and social security 256 217 256 217Other creditors 2,609 131 2,609 131Coalfield creditor 303 32 303 32Corporation taxDeferred Income 5,538 2,195 5,538 2,195Accruals 3,741 8,014 2,171 8,014

43,879 23,646 42,252 22,688

18 PROVISIONS FOR LIABILITIES AND CHARGES

Group Agency2003 2002 2003 2002£'000 £'000 £'000 £'000

Environmental LiabiltyAt 1 April 2002 250 350 250 350Increase/(Decrease) inprovision for year 300 (100) 300 (100)

31 March 2003 550 250 550 ' 250

DilapidationsAt 1 April 2002 584 458 584 458Provided during year (258) 126 (258) 126

31 March 2003 326 584 326 584

Deferred Tax

At 1 April 2002 (106) (106)

Provision for year 2,372 106 2,372 10631 March 2003 2,372 2,372

Total Provisions for

Liabilities and Charges 3,248 834 3,248 834

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

61


18 PROVISIONS FOR LIABILITIES AND CHARGES (CONTINUED)

The major components of the provision for deferred taxation which has beenfully provided at a corporation tax rate of 30% are as follows:

Accelerated capital allowancesShort term timing differences

Group2003 2002£'000 £'000

2,428(56)

2,372

Agency2003 2002£'000 £'000

2,428(56)

2,372

62


19A GOVERNMENT GRANT RESERVE - GROUP

Group

2003 2003 2002 2002£'000 £'000 £'000 £'000

At 1 April 2002 135,357 108,609

Fair Value Adjustment 334

Operational Assets // /'

Additions 1,133 1,997

Transfer to Investment Assets (431)

Disposals

Depreciation (810) (328)

Investment AssetsTransferred from properties occupied by theAgency 431

Additions 2,276 /~ 1,702

Disposals (5,339) (5,138)

Amounts written off (2,167)

Development Assets

Transferred from English Partnerships 6,845

Additions 37,769 28,915

Disposals (562) (2,336)

Amounts written off (24,818) (4,301 )

ProvisionsEnvironmental provision (300)

Amounts released to Income and (31,829) (14,701)Expenditure account (31,829) (14,701)

RevaluationsInvestment Assets 463

Development Assets 1,225

Fixed Asset InvestmentsAdditions 1,057

Balance at 31 March 2003 146,226 135,357

63


19B GOVERNMENT GRANT RESERVE. AGENCY

Agency2003 2003 2002 2002£'000 £'000 £'000 £'000

At 1 April 2002 139,952 114,429

Fair Value Adjustment 334

Operational AssetsAdditions 1,133 1,997

Transferred to Investment Assets (431)

Disposals

Depreciation (810) (328)

Investment AssetsTransferred from properties occupied by the 431Agency

Additions 2,276 1,702

Disposals (5,339) (5,138)

Amounts written off (2,167)

Development Assets

Transferred from English Partnerships 6,845

Additions 37,769 28,915

Disposals (562) (2,336)

Amounts written off (24,818) (4,301 )

ProvisionsEnvironmental Provision (300)

Amounts released to Income and (31,829) (14,701)

Expenditure account (31,829) (14,701)

RevaluationsInvestment Assets 463

Development Assets

Fixed Asset InvestmentsAdditions 1,057

Balance at 31 March 2003 150,821 139,952

64


20 INCOME AND EXPENDITURE RESERVE

Group Agency2003 2002 2003 2002£'000 £'000 £'000 £'000

At 1 April 2002 13,828 9,940 1,074 (1,861)Transferred from predecessor organisations1 April 2001 (696) (696)Other reserve release 257 257Subsidiary Undertaking 229(Deficit)/Surplus for year (9,233) 4,327 (3,577) 3,374

Balance at 31 March 2003 4,824 13,828 (2,503) 1,074

21 OTHER RESERVES

Group Agency2003 2002 2003 2002£'000 £'000 £'000 £'000

Balance at 1 April 2002 257 257

Movement in year (257) (257)

Balance at 31 March 2003

22 LOANS: Amounts repayable after more than one year

Group2003 2002£'000 £'000

Agency2003 2002£'000 £'000

Loan Stock

65


On 1 April 2003, the business, assets and liabilities of Speke Garston DevelopmentsLimited were transferred to the Agency (Note 28).

Under the terms of this agreement, Speke Garston Developments Limited haveagreed to redeem the loan stock in consideration for the payment of the sum of £1 toLiverpool City Council (if demanded). No notice has been issued to date.

23 RECONCILIATIONS OF NET CASHFLOW TO MOVEMENT IN NET FUNDS

2003£'000

Increase in cash for the period 5,392

Change in net funds 5,392

Net funds at 1 April 2002 5,332

Net Funds at 31 March 2003 10,724

24 OPERATING LEASES

As at 31 March 2003 the Agency had annual commitments under operatingleases as follows:

2003 2002Buildings Others Buildings Others£'000 £'000 £'000 £'000

Leases expiring:-- within one year 24 81

- between one and five years 60 189 27 109- over five years 845 823

905 213, 850 190

Rental costs of operating leases are charged to the Income and ExpenditureAccount on a straight line basis over the term of the lease. Operating leasecommitments over 5 years relate primarily to the Agency's Headquarters atWarrington.

66


25 CONTINGENT LIABILITIES

At 31 March 2003 there were no significant contingent liabilities (2002: nil).

26 COMMITMENTS

2003 2002£'000 £'000

Expenditure authorised by the Board andcontracted for at 31 March amounted to:Capital 3,100

27 FINANCIAL INSTRUMENT

The Agency has no borrowings and relies primarily on departmental grants forits cash requirements and is therefore not exposed to liquidity risks. It has nomaterial deposits and all material assets and liabilities are denominated insterling, so it is not exposed to interest rate risk or currency risk. Transactionsentered into which result in debtors due after more than one year have a lowcredit risk.

28 POST BALANCE SHEET EVENTS

On 1 April 2003, the Agency acquired the remaining share capital of SpekeGarston Developments Limited and The Estuary Management Company. Onthe same date, the business, assets (£10.77m) and liabilities (£8.04m) ofSpeke Garston Developments Limited were transferred to the Agency for £Nilconsideration. After accounting for amounts due between Speke GarstonDevelopments Limited and the Agency amounting to £6.41 m, net assets of£9.14m are expected to be accounted for in the Agency's accounts in 2003-04.

29 RELATED PARTY TRANSACTIONS

The NorthwestDevelopment Agency is a Non-Departmental Public Bodysponsored by The Department of Trade and Industry (DTI). DTI is regardedas a related party with which, during the year, Northwest Development Agencyhas had a significant number of material transactions.

In addition, the Agency has had various material transactions with otherGovernment Departments and other central bodies. Most of thesetransactions have been with English Partnerships (EP), Small BusinessService (SBS) and Trade Partners UK (TPUK).

67


29 RELATED PARTY TRANSACTIONS (CONTINUED)

Other Regional Development Agencies are also sponsored by the DTI and soare regarded as related parties. The Agency has had transactions with Eastof England Development Agency, East Midlands Development Agency,Advantage West Midlands, One North East, South East of EnglandDevelopment Agency, South West of England Development Agency andYorkshire Forward in the year.

Board members took no part in the discussions or in the subsequent decisionsby the Board on proposals which concern organisations that members haveconnections as reported on the register of member's interests.

During the year none of the Board members, key management staff or otherrelated parties has undertaken any material transactions with the NorthwestDevelopment Agency apart from those detailed on pages 68 and 69.

Related party transactions with subsidiary and associated undertakings areshown below. Amounts due to and from are disclosed in note 14.

Connected Party Relationship Total value oftransaction, £

Speke Garston Subsidiary 2,128,997 £1,580,000 Grants -Developments undertaking £82,515 ProfessionalLimited fees - £466,482

Contribution towardsoperating costs

The Estuary Subsidiary -

Management undertakingCompany LimitedMaryport Associated 529,610 GrantsDevelopments undertakingLimitedNew East Associated 390,000 £340,000 Grants -Manchester Limited undertaking £50,000 Contribution

towards operatingcosts

Liverpool Vision Associated 570,824 £505,625 Grants -Limited undertaking £65,199 Project

development andsupport

Rel

ated

Par

ty T

rans

actio

nsN

ame

Bry

an G

ray

Michael Shields

Cliv

e Je

anes

Den

nis

G M

endo

ros

Ric

hard

Lee

se

Ala

n M

anni

ng

Ani

l Kum

ar R

uia

Dr

Pau

leen

Lan

e

Cha

irm

an

Chi

ef E

xecu

tive

Boa

rd M

embe

r

Boa

rd M

embe

r

Boa

rd M

embe

r

Boa

rd M

embe

r

Boa

rd M

embe

r

Boa

rd M

embe

r

Yea

r en

ded

31st

Mar

ch 2

003

Con

nect

ed P

arty

The

Nat

iona

l Foo

tbal

l Mus

eum

CB

I N

orth

Wes

t Reg

ion

Spe

ke G

arst

on D

evel

opm

ent C

ompa

ny L

td

Live

rpoo

l Vis

ion

New

Eas

t Man

ches

ter

Lim

ited

Cou

ncil

of th

e U

nive

rsity

of S

alfo

rd

New

Eas

t Man

ches

ter

Lim

ited

Exc

elle

nce

Nor

th W

est

Man

ches

ter

Met

ropo

litan

Uni

vers

ity

Nor

th W

est A

eros

pace

Alli

ance

Nor

ther

n T

echn

olog

ies

New

Eas

t Man

ches

ter

Lim

ited

MID

AS

Man

ches

ter

City

Cou

ncil

Mer

seys

ide

Spe

cial

Inve

stm

ent F

und

Par

tner

s Lt

dM

echa

nics

Cen

tre

Lim

ited

Tra

des

Uni

on C

ongr

ess

Man

ches

ter

2002

Lim

ited

MID

AS

Uni

vers

ity o

f Sa

lfor

d

Nor

th W

est B

usin

ess

Lead

ersh

ip T

eam

Nor

th W

est T

extle

Net

wor

k Li

mite

dG

rana

da T

elev

isio

n Li

mite

d

UM

IST

Eng

lish

Par

tner

ship

s

Nor

th W

est R

egio

nal A

ssem

bly

Tra

fford

Met

ropo

litan

Bor

ough

Cou

ncil

Posi

tion

Tru

stee

Cha

irm

an

Dir

ecto

r

Dir

ecto

rD

irec

tor

Dep

uty

Cha

irm

an o

f G

over

nors

Boa

rd M

embe

rN

on-E

xecu

tive

Cha

irm

an

Dep

uty

Cha

irm

an o

f G

over

nors

Cha

irm

an

Dir

ecto

r

Dir

ecto

rAlternate Director

Cou

ncilo

r

Mem

ber

Dir

ecto

rR

egio

nal S

ecre

tary

Dir

ecto

rD

irec

tor

Cou

ncil!

Fin

ance

Com

mitt

ee

Mem

ber

Dir

ecto

r,. Director

Em

ploy

eeN

on-E

xecu

tive

Dire

ctor

Mem

ber

Ele

cted

Mem

ber

and

Dep

uty

Lea

der

Tot

al v

alue

of

tran

sact

ion

£

2,08

6,65

59,

450

2,12

8,99

7

570,

824

390,

000

593,

772

390,

000

8,78

5

399,

339

627,

813

5,61

5

390,

000

130

15,9

49,1

24

33,3

9513

,326

34,5

25

1,08

213

059

3,77

2

2,00

013

3,98

949

,048

6,86

549

8,36

4

99,1

05

Nat

ure

of tr

ansa

ctio

n

Gra

nts

£8,6

00 S

pons

orsh

ip -

£85

0 Pr

omot

iona

l eve

nts

£1,5

80,0

00 G

rant

s -

£82,

515

Pro

fess

iona

l fee

s -

£466

,482

Con

trib

utio

nto

war

ds o

pera

ting

cost

s£5

05,6

25 G

rant

s -

£65,

199

Proj

ect d

evel

opm

ent a

nd s

uppo

rt£3

40,0

00 G

rant

s -

£50,

000

Con

trib

utio

n to

war

ds m

arke

ting

cost

s£5

43,9

75 G

rant

s -

£15,

809

Con

sulta

ncy

serv

ices

- £

30,8

48 P

rofe

ssio

nal

fees

- £

3,00

0 M

anag

emen

t cos

ts -

£10

0 P

rom

otio

nal

even

ts -

£40

Con

fere

nces

and

sem

inar

s£3

40,0

00 G

rant

s -

£50,

000

Con

trib

utio

n to

war

ds m

arke

ting

cost

s£8

,060

Mem

bers

hip

fees

- £

650

Pro

mot

iona

lE

vent

s -

£75

Con

fere

nces

and

sem

inar

s£3

93,7

69 G

rant

s -

£5,5

20 T

rain

ing

- £5

0 R

oom

hire

£621

,661

Gra

nts

- £4

,379

Pro

mot

iona

l eve

nts

- £1

,748

Prin

ting

- £2

5 C

onfe

renc

e an

d se

min

ars

Con

trib

utio

n to

war

ds o

pera

ting

cost

s

68

£340

,000

Gra

nts

- £5

0,00

0 C

ontr

ibut

ion

tow

ards

Cos

tsC

ontr

ibut

ion

tow

ards

ope

ratin

g co

sts

£15,

792,

711

Gra

nts

- £6

8,27

8 R

ates

- £

27,0

30 S

econ

dee

Cos

ts -

£61

,105

Con

trib

utio

n to

war

ds o

pera

ting

cost

s

Gra

nts

Roo

m h

ire a

nd c

ater

ing

£33,

325

Gra

nts

- £1

,200

Spo

nsor

ship

Con

trib

utio

n to

war

ds o

pera

ting

cost

sC

ontr

ibut

ion

tow

ards

ope

ratin

g co

sts

£543

,975

Gra

nts

- £1

5,80

9 C

onsu

ltanc

y se

rvic

es -

£30

,848

Pro

fess

iona

lfe

es -

£3,

000

Man

agem

ent c

osts

- £

100

Pro

mot

iona

l eve

nts

- £4

0C

onfe

renc

es a

nd s

emin

ars

Con

trib

utio

n to

war

ds o

pera

ting

cost

sG

rant

sSp

onso

rshi

p

£5,0

00 S

pons

orsh

ip -

£1,

865

Roo

m h

ire£3

67,1

56 S

ervi

ce L

evel

Agr

eem

ent -

£43

,168

IT c

harg

es -

£56,

270

Pro

fess

iona

l fee

s -

£17,

977

Tra

inin

g -

£13,

728

Con

sulta

ncy

- £6

5 P

rom

otio

nal e

vent

s£5

9,88

5 G

rant

s -

£10,

000

Spon

sors

hip

- £2

9,22

0C

onfe

renc

es a

nd s

emin

ars

954,335 Grants

Related P

arty Transactions

Nam

eY

ear ended 31st March 2003

Connected P

artyT

otal value ofT

ransaction £Position

John Dunning

Board M

ember

Cum

bria Rural E

nterprise Agency Lim

itedV

oluntary Action C

umbria

North W

est Business Leadership T

eam

Chairm

anVice President

Mem

ber

35,96915,0542,000,

Mike Storey

Board M

ember

Liverpool Vision

Director

570,824

Liverpool C

ity Council

Councilor I L

eader1,490,917

Brenda Smith

Board M

ember

MID

AS

Liverpool V

isionD

irectorD

irector130

570,824

Business in the C

omm

unityM

ember

North W

est Business Leadership T

eamM

ember

2,000

Nevile C

hamberlain

Board M

ember

Council of the U

niversity of Salford

Mem

ber593,772 £543,975 G

rants - £15,809 Consultancy service-

£30,848 Professional fees - £3,000 Managem

ent costs

New

East M

anchester Limited

Director

390,000

Manchester 2002 Lim

itedE

nvrolink (North W

est) Limited

Director

Director and C

hairman

1,082752,048

Professor Sir Martin H

arris Board M

ember

University of M

anchesterV

ice-Chancellor

239,500 Grants

Marie R

imm

erB

oard Mem

ber * St Helens M

etropolian Borough C

ouncilN

orth West R

egional Assem

blyL

eaderM

ember

4,219,379 £4,218,014 Grants - £1,365 V

acant rates22,701 £22,701 - Conferences and seminars

Robert Johnston

Board M

ember * T

he Visual Link Lim

itedM

anaging Director

184,552 Grants

2,166,642 £2,165,219 Grants - £1,423 V

acant ratesM

ike Doyle

Deputy (RetiredjA St Helens Metropolian Borough Council

Councilor

Felicity G

oodeyB

oard Mem

ber A E

xcellence North W

est(R

etired)N

on-Executive D

irector4,725 £4,000 M

embership fees - £650 P

romotional

Events - £75 C

onferences and seminars

The Low

ry Centre

North W

est Regional A

ssembly

Non-E

xecutive Director, C

hairman

Mem

ber6,334 Room hire

76,404 £59,885 Grants - £10,000 S

ponsorship - £6,519C


Manchester C

hamber of C

omm

erce and IndustryN

on-Executive D

irector andPresident

* Appointed to the board on 14 D

ecember 2002, therefore transactions only included for the period from

15 Decem

ber 2002 to 31 March 2003

A R

esigned from the board on 13 D

ecember 2002, therefore transactions only included for the period from

1 April 2002 to 14 D

ecember 2002

Nature of transaction

Grants

£9,806 Grants - £5,248 Professional fees

Contribution tow

ards operating costs

320

£505,625 Grants - £65,199 Project developm

ent andsupport£1,326,462 G

rants - £57,311 Rates - £68,692 V

acant rates- £30,000 S

ponsorship- £3,545 Land rents - £1,458M

anagement costs - £3,449 contribution tow


Contribution tow

ards operating costs£505,625 G

rants - £65,199 Project development and

Support£150 C

onferences and seminars - £85 T

rainingcourses - £85 P

romotional events

Contribution to operating costs

69£100 P

romotional events - £40 C


£340,000 Grants - £50,000 C

ontribution towards

Marketing costs

Contribution tow

ards operating costsG

rants

25! £25 Contribution tow


70

NORTH WEST REGIONAL DEVELOPMENT AGENCY

ACCOUNTS DIRECTION GIVEN BY THE SECRETARY OF STATE WITH THECONSENT OF THE TREASURY, IN ACCORDANCE WITH SECTION 14(2) OF THE

REGIONAL DEVELOPMENT AGENCIES ACT 1998

1. The annual accounts of North West Regional Development Agency (hereafter in thisaccounts direction referred to as "the Agency") shall give a true and fair view of theincome and expenditure and cash flows for the year and the state of affairs at the yearend. Subject to this requirement, the annual accounts shall be prepared in accordancewith:-

a. the accounting and disclosure requirements given in the Treasury guidance

Executive Non- Departmental Public Bodies Annual Reports and AccountsGuidance (issued July 2000), as amended or augmented from time to time, andsubject to Schedule 1 to this direction;

b. any other guidance that the Treasury may issue from time to time in respect ofaccounts that are required to give a true and fair view;

c. any other specific disclosure requirements of the Secretary of State.

insofar as these requirements are appropriate to the Agency and are in force for theyear for which the accounts are prepared, and except where agreed otherwise with theSecretary of State and with the Treasury in which case the exception shall be describedin the notes to the accounts.

2. Schedule 1 to this direction gives clarification of the application of the accounting anddisclosure requirements of the Companies Act 1985 and accounting standards and alsogives any exceptions to standard Treasury requirements. Additional disclosurerequirements of the Secretary of State are set out in Schedule 2.

3. This direction shall be reproduced as an appendix to the annual accounts.

4. This direction replaces that dated 31 March 2001.

Signed by authority of the Secretary ofState for Trade and Industry

Date: 26 March 2002

A grade 3 offcer inThe Department of TradeAnd Industry

71

SCHEDULE 1

1. Expenditure in the income and expenditure account shall include a notional cost ofcapital, at 6% of the average net assets during the year. This amount shall be reversedafter the line showing the surplus or deficit for the year.

2. Grants awarded by the Agency shall be included as expenditure in the income andexpenditure account when there is a constructive obligation to pay the grant.

3. Stocks and work-in-progress shall be included in the balance sheet at the lower ofestimated replacement cost and estimated net realisable value.

4. Government grants used to pay for fixed assets shall be credited to a grant reserve.This is different from accounting standard SSAP4, which says that such grants shouldbe credited to deferred income.

5. Revaluation gains on fixed assets paid for from government grant shall be taken tothe grant reserve in the balance sheet. This is contrary to the Companies Act 1985,which requires such gains to be credited to the revaluation reserve.

6. On the disposal of a fixed asset paid for wholly by government grant, an amountequal to the profi or loss on disposal shall be transferred .from the grant reserve to the

income and expenditure account. Where government grant was only used .to pay forpart of the cost of the asset, the amount of this transfer shall be reduced in proportion.These requirements are different from those in accounting standard FRS3 which saysthat an amount transferred to a reserve, other than from the income and expenditureaccount, should not be recognised in subsequent income and expenditure accounts.

7. A provision shall be made for deferred tax in accordance with current accounting

standards.

8. The foreword and balance sheet shall be signed and dated on behalf of the boardmembers and by the accounting offcer.

72

SCHEDULE 2

ADDITIONAL DISCLOSURE REQUIREMENTS

The following information shall be disclosed in the annual accounts, as a minimum, andin addition to the information required to be disclosed by paragraph 1 of this direction.

1. The foreword

A statement on the Agency's policy for conserving energy, reducing waste andminimising the release of greenhouse gases.

2. The income and expenditure account or the notes thereto

(a) the following income-

(i) grants

(ii) proceeds on the disposal of development properties

(Hi) proceeds on the disposal of fixed assets

(iv) rents and maintenance charges receivable

(v) joint venture profits

(b) the following expenditure -

(i) book value of development properties sold

(ii) movements in provisions for losses on development properties

(iii) joint venture losses

(iv) debts written off and movements in provisions for bad and doubtfuldebts

3. The notes to the annual accounts

(a) an analysis of grants from:

(i) The Department of Trade And Industry

(ii) European Community funds

(iii) other sources

73

(b)(i) an analysis of income and expenditure based on the Key Drivers forthe agency.

*(c) a report on the emoluments of the chief executive and of each individualboard member and senior manager during the year (with separate disclosurewhere more than one person occupied an office). The report shall include fulldetails of all elements in the remuneration package of each person, such asfees, salary, annual bonuses, payment on termination of offce, other taxablebenefits, pension contributions, and the performance related elements of these(for which the basis on which the performance is measured shall be explained).For each board member, the report shall also show the time commitment interms of days per month;

*(d) if a board member, the chief executive or a senior manager has beenappointed for a fixed term or is on a fixed-term service contract, the term shall bestated together with details of any predetermined compensation on terminationof office;

*(e) a statement of the pension entitlements earned by the chief executive andby each individual board member and senior manager during the year, disclosedon a basis recommended for non-departmental public bodies by the Treasury, orrecommended for companies by the Faculty of Actuaries or the Institute ofActuaries;

(f) details of employees, other than board members, showing:-

(i) the average number of persons employed duringthe year, includingpart-time employees and secondees, analysed between appropriatecategories

(ii) the total amount of loans to employees

(iii) employee costs during the year, showing separately:-

(1) wages and salaries

(2) early retirement costs

(3) social security costs

(4) contributions to pension schemes

(5) payments for unfunded pensions

(6) other pension costs;

(g) a statement showing the movements during the year on long term loansgiven by the Agency and on current asset investments held;

74

(h) a statement of outstanding commitments for loans granted and of committedlending in future periods;

(i) an analysis of liquid resources, as defined by accounting standard FRS1(revised);

U) in the note on debtors, prepayments and payments on account shall each beidentified separately;

(k) particulars of any transaction, arrangement or contract (other than acontract of service or of employment with the Agency), includingtransactions at arm's length, entered into by the Agency with anotherparty, exceeding £5,000 in value, in which party a board member, anexecutive, a senior employee, or a person connected with any of theforegoing, at any time during the year, had a direct financial interest thatwas notified to the Agency. For these purposes, a senior employeemeans someone whose emoluments in the year (excluding pensioncontributions but including the other elements mentioned in sub-paragraph 3(d), above) exceeded £50,000; and a connected person shallbe as defined in section 839 of the Income and Corporation Taxes Act1988 or superseding legislation and including a member of the samehousehold;

(I) a statement of losses and special payments during the year, beingtransactions of a type which Parliament cannot be supposed to havecontemplated. Disclosure shall be made of the total of losses and specialpayments if this exceeds £100,000, with separate disclosure and particulars ofany individual amounts in excess of £100,000. Disclosure shall also be made ofanyloss or special payment of £100,000 and below if it is considered material inthe context of the Agency's operations.

* 3(c), 3(d) and 3(e). Under the Data Protection Act 1998, individuals need to give theirconsent for some of the information in these sub-paragraphs to be disclosed. If consentis withheld, this should be stated next to the name of the individuaL.

Document

Documents

regional economic strategy

regional development

new regional economic

north west regional

transport strategy

north west science strategy

north west regionalassembly

res priorities