Corporate report

Accountability report

Updated 20 October 2023

This was published under the 2022 to 2024 Sunak Conservative government

Purpose of the accountability report

The accountability report sets out how the department meets the key accountability requirement to Parliament. It comprises the 3 reports below.

The corporate governance report

• provides names of ministers and directors with oversight for the department
• explains the governance structures in place and activities during the year

The staff and remuneration report

• presents staff numbers and costs, and other employee matters
• discloses the remuneration of our ministers and directors

The Parliamentary accountability and audit report

• presents the department’s expenditure against the budgets set by Parliament
• presents the auditor’s report and opinion on the financial statements

Corporate governance report

Statement of accounting officer’s responsibilities

Under the Government Resources and Accounts Act 2000 (GRAA), HM Treasury has directed the Department for Business, Energy and Industrial Strategy to prepare, for each financial year, consolidated resource accounts detailing resources acquired, held or disposed of, and the use of resources, during the year by the department (inclusive of its agencies) and its sponsored non-departmental public bodies and other arm’s-length public bodies designated by order made under the GRAA by Statutory Instrument 2022 No. 1319 (together known as the ‘departmental group’, consisting of the core department and sponsored bodies listed in note 27 to the accounts).

The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the department and departmental group, and of the income and expenditure, statement of financial position and cash flows of the departmental group for the financial year.

In preparing the accounts, the accounting officer of the department is required to comply with the requirements of Government Financial Reporting Manual and in particular to:

• observe the Accounts Direction issued by the Treasury, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis
• ensure that the department has in place appropriate and reliable systems and procedures to carry out the consolidation process
• make judgements and estimates on a reasonable basis, including those judgements involved in consolidating the accounting information provided by non-departmental and other arm’s-length public bodies
• state whether applicable accounting standards as set out in the Government Financial Reporting Manual have been followed, and disclose and explain any material departures in the accounts
• prepare the accounts on a going concern basis
• confirm that the annual report and accounts as a whole is fair, balanced and understandable and take personal responsibility for the annual report and accounts and the judgements required for determining that it is fair, balanced and understandable

HM Treasury has appointed the permanent head of the department as accounting officer of the Department for Business, Energy and Industrial Strategy. The accounting officer of the department has also appointed the chief executives (or equivalents) of its sponsored non- departmental and other arm’s length public bodies as accounting officers of those bodies.

The accounting officer of the department is responsible for ensuring appropriate systems and controls are in place to ensure any grants the department makes to its sponsored bodies are applied for the purposes intended and that such expenditure and the other income and expenditure of the sponsored bodies are properly accounted for, for the purposes of consolidation within the resource accounts. Under their terms of appointment, the accounting officers of the sponsored bodies are accountable for the use, including the regularity and propriety, of the grants received and the other income and expenditure of the sponsored bodies.

The responsibilities of an accounting officer, including responsibility for the propriety and regularity of the public finances for which the accounting officer is answerable, for keeping proper records and for safeguarding the assets of the department or non-departmental or other arm’s length public body for which the accounting officer is responsible, are set out in Managing Public Money published by HM Treasury.

Accounting officer’s confirmation

As accounting officer, I have taken all the steps I ought to have taken to make myself aware of any relevant audit information and to establish that the Department for Business, Energy and Industrial Strategy’s auditors are aware of that information. So far as I am aware, there is no relevant audit information of which the auditors are unaware.

I also confirm that this annual report and accounts is fair, balanced and understandable.

Sarah Munby
Permanent Secretary and Principal Accounting Officer

10 October 2023

Report of the lead non-executive director

As the lead non-executive board member for BEIS, I have been impressed by the breadth of the department’s wide-ranging portfolio and the tangible real-life impact it has had on the country.

The department was at the forefront of the delivery of energy relief schemes which helped businesses and households across the country with the cost of their energy bills following Russia’s invasion of Ukraine. The department also delivered the successful ‘It All Adds Up’ campaign helping ensure households were kept warm through winter. BEIS proactively supported the people of Ukraine by phasing out Russian oil imports to the UK and putting energy security at the forefront of its priorities.

The department remained committed to its net zero priorities with the launch of the British Energy Security Strategy. As well as setting out how homegrown power would be accelerated, the strategy unleashed the use of science to create innovative ways to secure energy security through technology such as heat pumps and hydrogen.

The UK was further positioned as a science superpower through the department’s launch of the Advanced Research and Invention Agency (ARIA), an independent research body that will create transformational research programmes at pace.

The Prime Minister recognised the importance of the work of the department and in February created 3 new departments to streamline BEIS’ priorities: the Department for Energy Security & Net Zero, the Department for Science, Innovation & Technology and the Department for Business and Trade.

The non-executive board members and I would like to thank colleagues across BEIS for their hard work and dedication and wish them well as they move forward in their new departments.

Ann Cairns
Lead Non- Executive Director

Directors’ report

The Directors’ report covers the period from the start of the year to 31 March 2023. It provides names and ministerial titles of those who served as ministers. It also provides names of non-executive directors and executive directors.

Joiners and leavers refer to those who joined or left the relevant posts. In the case of executive directors, they may not have left the Department, particularly if they served as interim executive directors.

Conflicts of interest

Board members are required to declare personal or business interests which may influence (or be perceived to influence) their judgement, when performing their duties.

BEIS has an established conflicts of interest procedure, including declaring interests at the start of board meetings. No conflicts of interests were declared during board meetings in 2022-23.

Register of board members’ interests are published on GOV.UK.

Ministers

• The Rt Hon Grant Shapps MP, Secretary of State for Business, Energy, and Industrial Strategy - from 25 October 2022
• The Rt Hon Jacob Rees-Mogg MP, Secretary of State for Business, Energy, and Industrial Strategy - from 6 September 2022 to 25 October 2022
• The Rt Hon Kwasi Kwarteng MP, Secretary of State for Business, Energy, and Industrial Strategy - to 5 September 2022
• Graham Stuart MP, Minister of State (Minister for Climate) - from 6 September 2022
• Nusrat Ghani MP, Minister of State (Minister for Science & Investment Security) - from 7 September 2022
• George Freeman MP, Minister of State - from 26 Oct 2022
• Jackie Doyle-Price MP, Minister of State - from 7 September 2022 to 27 October 2022
• The Rt Hon Greg Hands MP, Minister of State - to 6 September 2022
• Lord Martin Callanan, Parliamentary Under Secretary of State
• Kevin Hollinrake MP, Parliamentary Under Secretary of State - from 28 October 2022
• Dean Russell MP, Parliamentary Under Secretary of State - from 20 September 2022 to 27 October 2022
• Jane Hunt MP, Parliamentary Under Secretary of State - from 8 July 2022 to 8 September 2022
• Paul Scully MP, Parliamentary Under Secretary of State - to 6 July 2022
• Lee Rowley MP, Parliamentary Under Secretary of State - to 6 July 2022
• Sir Gerry Grimstone, Parliamentary Under Secretary of State - to 6 July 2022

Non-executive directors

• Ann Cairns, Lead NED, Board, NGC chair
• Vikas Shah, Board, ARAC chair ARAC chair - from 24 June 2022
• Nigel Boardman, Board, ARAC chair - to 23 June 2022
• Stephen Hill, Board
• Peter Mather, Board, ARAC
• Elaine Clements, ARAC
• Bryan Ingleby, ARAC
• Alison Rodwell, ARAC
• Jane Whittaker, ARAC - to 31 December 2022
• Andrew Jamieson, PIC - from 1 May 2022

Executive directors

• Sarah Munby, Permanent Secretary
• Clive Maxwell, 2nd Permanent Secretary - from 21 November 2022
• David Bickerton
• Caleb Deeks
• Freya Guinness
• Simon Hulme
• Alice Hurrell
• Ashley Ibbett
• Gavin Lambert
• Lee McDonough
• Dan Micklethwaite
• Abigail Morris
• Paul Monks
• Ben Rimmington
• Jo Shanmugalingam
• Jonathan Mills - from 6 June 2022
• Donna Leong - from 6 June 2022
• Beatrice Kilroy-Nolan - from 11 October 2022
• Joanna Whittington - to 1 December 2022
• Madeline McTernan - to 15 January 2023
• Tom Taylor - to 12 February 2023

Governance statement

Overview

The governance statement sets out how the department was governed by management during the year. It provides an outline of our governance structure, a summary of the board and committee activities, and a risk assessment.

On 7 February 2023, the Prime Minister announced a major machinery of government change which created 3 new government departments, realigned the profiles of Cabinet Office and Department of Culture Media and Sport, and resulted in the abeyance of BEIS. To maintain clear line of sight and transparency, HMT have permitted that this annual report and accounts report on the BEIS 2022-23 Estimate. The BEIS accounting officer remained the accounting officer for the BEIS legacy during this period. Any adjustments in governance following the machinery of government changes are outlined in individual sections.

Our governance structure

Departmental board: advising on strategy, performance management and risk management.

Executive Committee: sets the strategic direction of the department and manages the day-to-day running of the department’s resources, policies and programmes (reports into the Departmental Board).

Nominations and Governance Committee: senior level remuneration and succession planning (reports into the Departmental board).

Audit and Risk Assurance Committee: assurance of audit and risk control functions (reports into the Departmental Board).

People and Operations Committee: manages human resources, estates, operations, digital BEIS and people related issues (reports into the Executive Committee).

Performance and Risk Committee: monitors frameworks for performance against targets, budgets and risks (reports into the Executive Committee).

Projects and Investment Committee: approvals of key investment proposals and projects (reports into the Executive Committee).

Shadow Executive Committee: staff advisory body (provides feedback to the Executive Committee).

Shadow People and Operations Committee: staff advisory body (provides feedback to the People and Operations Committee).

Challenge function for performance and risk committee: challenge function on departmental performance and risks (provides feedback to the Performance and Risk Committee).

Keyholder panel for the projects and investments committee: assurance of investment proposals (provides feedback to the Projects and Investment Committee).

Departmental board

Chair

Rt Hon Grant Shapps MP, Secretary of State and Chair, Departmental Board

Meeting attendance

Total number of meetings held, 3

(x/x = number attended /number eligible to attend.)

Members	Number of meetings attended
Ministers
Rt Hon Grant Shapps MP (from 25 Oct 2022)	1/1
Rt Hon Jacob Reese-Mogg MP (from 6 Sep 2022 to 25 Oct 2022)	1/1
Rt Hon Kwasi Kwarteng MP (to 5 Sep 2022)	1/1
Lord Grimstone of Boscobel Kt (to 6 Jul 2022)	0/1
Rt Hon Greg Hands MP (to 6 Sep 2022)	0/1
Graham Stuart MP (from 6 Sep 2022)	1/2
Nusrat Ghani MP (from 7 Sep 2022)	1/1
Jackie Doyle-Price MP (from 7 Sep 2022 to 27 Oct 2022)	0/1
Minister Dean Russell (from 20 Sep 2022 to 27 Oct 2022)	0/1
Lord Callanan	0/1
Senior officials / executive directors
Sarah Munby	3/3
Clive Maxwell (from 21 Nov 2022)	1/1
Joanna Whittington (to 1 Dec 2022)	1/1
Jonathan Mills (from 6 Jun 2022)	2/2
Tom Taylor (to 12 Feb 2023)	3/3
Non-executive directors
Ann Cairns	3/3
Stephen Hill	3/3
Vikas Shah	3/3
Peter Mather	3/3
Nigel Boardman (to 23 Jun 2022)	1/1

Notes: Where members were unable to attend meetings in person, they were able to share their views in advance with the chair.

Role

The departmental board (the board) provides strategic and operational leadership of the department, from which EXCO derives its vision to deliver. The board has been integral to the department’s response to the cost-of-living crisis and energy security.

Key areas of discussion

• Global energy markets and energy support schemes
• Inflationary pressures and cost of living
• Net zero
• Emerging technologies, introduction, and regulation
• Research and development funding
• Major projects deep-dives

Compliance with the corporate governance code

Our approach to governance is in line with ‘the code’ – Corporate Governance in Central Government Departments: Code of Good Practice. We were compliant with the Code in all areas except for the 2 below:

• An annual board effectiveness evaluation. An external board evaluation was being planned to take place in 2022-23 however machinery of government changes in February 2023 meant that it did not take place
• The board meeting at least quarterly. The board only met 3 times during the year. A fourth meeting was planned in March 2023 but this was cancelled due to the machinery of government changes

Board appointments

There were no new non-executive board appointments during 2022-23. Nigel Boardman stepped down in June 2022. Following the machinery of government changes in February 2023 the non-executives roles in the former BEIS seized to exist.

The department is responsible for corporate governance, champions women on boards and wants to lead by example in this area. At end of 2022-23, the board’s gender diversity was at 20% and BAME members at 10%.

Quality of data used by the board

The papers received by the board have been of high quality. Meetings were held either virtually or as hybrid meetings and were efficiently chaired. Challenge and discussion were encouraged.

BEIS’s governance team provided a comprehensive secretariat service to the board and committees. This ensured the effective and efficient administration of the board and its activities.

Biographies of board members

Departmental board member biographies.

Nominations and Governance Committee

Chair

Ann Cairns, Lead Non-executive and Chair, Nominations and Governance Committee

Meeting attendance

Total number of meetings held, 2

(x/x = number attended /number eligible to attend.)

Members	Number of meetings attended
Executive directors
Sarah Munby	2/2
Alice Hurrell	2/2
Non-executive directors
Ann Cairns	2/2

Role

The Nominations and Governance Committee (NOMCO) is an advisory committee of the departmental board. It provides assurance on the department’s strategies and plans for talent, succession, and capability management of senior staff. It also considers whether the people related processes are effective in helping BEIS achieve its goals.

Key areas of discussion

• Senior talent pipeline
• Capability strategy
• Rewards strategy
• Senior performance and remuneration

Audit and Risk Assurance Committee

Chair

Vikas Shah, Non-executive and Chair, Audit and Risk Assurance committee

Meeting attendance

Total number of meetings held, 7

(x/x = number attended /number eligible to attend.)

Members	Number of meetings attended
Executive directors
Sarah Munby	6/7
Clive Maxwell (from 21 Nov 2022)	2/2
Freya Guinness	6/7
Kim Humberstone (to Sep 2022)	3/3
Tim Sparrow (from 8 Sep 2022)	4/4
Simon Hulme	4/7
Non-executive directors
Vikas Shah	7/7
Nigel Boardman (to 23 Jun 2022)	1/1
Peter Mather	7/7
Bryan Ingleby	7/7
Elaine Clements	7/7
Alison Rodwell	7/7
Jane Whittaker (to 31 Dec 2022)	4/5

Note: The March 2023 meeting was carried out via correspondence and focussed on the production of the 2022-23 annual report and accounts.

Role

The Audit and Risk Assurance Committee (ARAC) function remained as previous years. It is an advisory committee of the departmental board and provides advice and assurance to the board and accounting officer on matters of financial accountability, assurance, and governance.

Since the machinery of government changes on 7 February 2023, the ARAC has continued to meet to provide independent scrutiny of the BEIS annual report and accounts 2022-23.

Key areas of discussion

• The management of departmental risk and the risk management framework
• The preparation of the annual report and accounts
• The work of internal and external audits
• Director generals’ group management of risk and assurance
• Cyber security risk management and security strategy
• Anti-fraud policies and practices
• Compliance, including business appointment rules
• Third party supplier assurance
• Shared services programme assurance
• Staff recruitment challenges including IT and legal
• Civil contingencies
• Partner organisation risk and assurance, including continued engagement with partner organisations (POs) by attending their ARAC meetings and welcoming observers to BEIS ARAC meetings

Executive Committee

Chair

Sarah Munby, Permanent Secretar and Chair, Executive Committee

Meeting attendance

Total number of meetings held, 18

(x/x = number attended /number eligible to attend.)

Members	Number of meetings attended
Executive directors
Sarah Munby	16/18
Clive Maxwell (from 21 Nov 2022)	3/3
Joanna Whittington (to 1 Dec 2022)	9/15
Jo Shanmugalingam	14/18
Freya Guinness	16/18
Ashley Ibbett	15/18
David Bickerton	14/18
Jonathan Mills (from 6 Jun 2022)	9/10
Lee McDonough	11/18
Ben Rimmington	14/18
Caleb Deeks/Gavin Lambert	14/18
Paul Monks	14/18
Beatrice Kilroy-Nolan (from 11 Oct 2022)	6/6
Tom Taylor (to 12 Feb 2023)	16/18
Alice Hurrell	17/18
Dan Micklethwaite	16/18
Simon Hulme	13/18
Abigail Morris	15/18
Donna Leong	9/18
Madelaine McTernan (to 15 Jan 2023)	0/0

Role

The Executive Committee (EXCO) is responsible the day-to-day management of BEIS and the delivery of its strategic objectives. EXCO is the forum to discuss key cross cutting issues impacting the entire organisation. The reforms made in March 2022 to enable EXCO to home in on strategic lens while remaining agile to evolving challenges and were successfully embedded during 2022-23. As part of these reforms EXCO meetings focused on 3 rotating themes:

• people and operations
• policy and strategy
• performance and delivery

Key areas of discussion

• Key departmental risks and mitigation
• Departmental finances
• Employee engagement and resourcing
• Business continuity
• Delivery of the net zero strategy and industrial policy
• Economic outlook and the impact of inflation
• Business planning

Executive Committee sub-committees

Performance and Risk Committee

Co-Chairs
Freya Guinness, Co-chair, Performance and Risk Committee

Lee McDonough, Co-chair, Performance and Risk Committee

Role and discussions during the year
The Performance and Risk Committee is a delegated committee of EXCO. It reviews the overall performance of the department and focuses on overarching risk issues facing the department.

Key areas of discussion

• Risk framework and risk appetite statement
• Monitoring of departmental risks, agreeing to escalations of risks from group level and updates to existing risks
• Scrutiny of resourcing and delivery risks, including the impact of inflation and delivery confidence
• Lessons learnt reports including on business planning and winter preparedness.
• Review of partner organisation risk
• Strengthening of monitoring and evaluation
• Continuing to monitor departmental responses to ongoing issues such as public sector equality duty

Projects and Investments Committee

Co-Chairs
Jonathan Mills, Co-chair, Project, and Investments Committee (from February 2023)

David Bickertongh, Co-chair, Project, and Investments Committee

Deputy Chairs
Hugo Robson, Project and Investments Committee Deputy Chair

Tom Taylor, Project and Investments Committee Deputy Chair (until February 2023)

Joanna Whittington, Project and Investments Committee Co-Chair (until October 2022)

Role
Project and Investment Committee (PIC) is a delegated Committee of EXCO. It considers investment proposals over £20 million or those deemed novel, contentious, or repercussive.

Since the machinery of government changes on 7 February 2023, PIC has continued to meet to consider investments proposals on an interim basis until approval processes are fully integrated into the new departments (Department for Energy Security and Net Zero, Department for Science, Innovation and Technology, Department for Business and Trade). Rotating membership has been strategically aligned to the new departments.

Key areas of focus

• Supporting households through the Energy Price Guarantee and other energy support schemes
• Delivery of net zero and energy security through programmes such as Clean Heat Market Mechanisms and Boiler Upgrade scheme
• Science advances through innovation projects such as the Offshore Wind Manufacturing Investment Scheme and Great British Nuclear, a state backed delivery body that will address constraints in the nuclear market, help the UK reach net zero by 2050 and support nuclear builds such as Sizewell C

People and Operations Committee

Co-Chairs
Ashely Ibbett, Co-chair, People and Operations Committee

Jo Shanmugalingam, Co-chair, People and Operations Committee

Role
People and Operations Committee (POPCO) is a delegated committee of EXCo and considers matters relating to human resources, accommodation, security, diversity and inclusion, and IT. The People and Operations Committee underwent a reform towards the end of 2022 to strategically align it with the priorities of BEIS Corporate Services.

Key areas of discussion

• Places for Growth
• People survey results and actions
• Development and tracking of the corporate scorecard
• Ensuring BEIS remains an inclusive place to work
• Career progression and staff retention

Net zero governance

Due to the importance of net zero within BEIS, the permanent secretary chairs 2 net zero boards. The Net Zero Delivery Board oversees the department’s portfolio of initiatives that contribute to the 2050 net zero goal. The Net Zero Strategy Board discusses the policy actions BEIS should bring forward to meet ambitions.

BEIS is also involved in 2 cross-government committees. The Domestic and Economic Affairs (Energy, Climate and Net Zero) Cabinet Committee reviews the successes of the Climate Action Committees and ensures that net zero continues to have a dedicated Cabinet-level forum. The climate change Integrated Review Implementation Group (IRIG) provides a whole of government approach to domestic and international climate policy and escalates issues to the Cabinet Committee as appropriate.

Management of outside interests

Register of interests for directors

See directors’ report on page 72.

Process for managing outside interests

The department has a policy in place for the declaration of interests for all staff, which provides a framework to deal with any actual, potential or perceived conflicts of interest between staff, suppliers, and other stakeholders.

All staff must ensure declarations are made at the earliest opportunity once they are aware that a conflict of interest may exist. Once a declaration is made, line management must ensure they review and agree any mitigating actions, if required.

All senior civil servants (SCS) are required to fill out a Conflicts of Interest Declaration Form annually. Nil returns should also be declared. SCS Conflict of Interest Declaration Forms are reviewed by the BEIS conflicts officer where an interest has been declared and reported to the Cabinet Office.

The policy also provides guidance on employees holding paid positions external to BEIS.

Details of remunerated outside employment held by SCS are published on GOV.UK.

Special advisers

In line with the current declaration of interests policy for special advisers, all former BEIS special advisers have declared any relevant interests or confirmed they do not consider they have any relevant interests. The permanent secretary has considered these returns and the following relevant interests are set out in public:

Name	Interest
Fred De Fossard	Director of De Fossard Communications. During their time as a special adviser this directorship is unpaid.
Radomir Tylecote	Fellow of the Institute of Economic Affairs. During their time as a special adviser Radomir will not publish papers, input into any work for the Institute of Economic Affairs and not receive any payment.

Business appointment rules

The Business Appointment Rules are designed to uphold the core values in the Civil Service Code of integrity, honesty, objectivity, and impartiality. Before accepting any new appointment or employment, individuals must consider whether an application under the rules is required. If it is required, they should not accept or announce a new appointment or offer of employment before it has been approved. Countersigned applications are sent to the Human Resources function for assessment and action. All SCS3 and above applications are referred to the Advisory Committee for Business Appointments. The Business Appointment Rules are discussed at Audit and Risk Committees.

In compliance with the Business Appointment Rules, the department is transparent in the advice given to individual applications for senior staff, including special advisers. Advice regarding specific business appointments has been published on GOV.UK.

To raise awareness, the department includes information on Business Appointment Rules in staff contracts, induction packs, leaver guidance and the departmental intranet pages.

• number of exits from the Civil Service at senior civil service (SCS) level: 28
• number of breaches of the rules in 2022-23 and prior year: 0

Grade	number of BARs applications assessed by the department over the year	number of BARs applications where conditions were set	number of applications found to be unsuitable for the applicant to take up
SEO	3	3	-
G7	16	16	-
G6	8	8	-
SCS pay band 1	13	13	-
SCS pay band 2	2	2	-
Special advisers	1	1	-
Total	43	43	-

Risk management

Risk management responsibilities

The department is responsible for having a risk management framework and reviewing its effectiveness. The framework includes the standard process of - identify, assess, address, review and report risks. Effectiveness reviews take the form of regular engagement with risk champions, and an annual consultation of the framework. This brings about continuous improvement.

Processes and structure

Our principal risks in 2022-23 are disclosed under risks affecting delivery of our objectives in the Performance Report. The process to identify these risks involves horizon scanning by the EXCo on an annual basis, and escalations as appropriate throughout the year. The risks are evaluated and managed using an online reporting system. These processes were in place in 2022-23.

Monitoring and assurance

The output from the online reporting system is reported monthly to governance boards. This is also supported at group level by risk champions. They review the group level risks being mitigated by directorates within the group. They consider and flag potential escalations to the group leadership team.

Effectiveness reviews

P&R review and monitor departmental risks. During the year we continued to improve the online risk management tool to ensure risks were being reported regularly. We have improved the risk quality assessment tables to focus on project risk reporting. This has resulted in an improvement in the number of project risks reported. We’ve also improved online reporting tools like Power BI to present better risk information (focusing on risk appetite).

Compliance

During the year, we updated our risk management framework and risk appetite statement to ensure consistency with government best practice in the Orange Book. Improvements have been made to both guidance documents to make them more accessible in terms of layout and language. Screen-reader accessible versions have also been produced.

Government Internal Audit Agency

The Government Internal Audit Agency (GIAA) provides the internal audit service for BEIS. For 2022-23, the group chief internal auditor provided a ‘moderate’ opinion. GIAA concluded that BEIS had maintained an adequate system of governance, risk management and internal control, taking the opportunity to build on and enhance processes through a system of continuous improvement and in response to audit recommendations. The position had a slight deterioration from prior year with BEIS seeking to deliver an increasingly broad, complex, and fast paced mission with fixed capacity and constrained (at least in the short term) capability; and disruption to the control environment caused by machinery of government changes (MOG).

GIAA highlighted that the increasing shift towards delivery work (for what has traditionally been a policy department) is adding to the pressures on departmental capability and capacity. GIAA continued to highlight staff welfare and risk of increased levels of stress and burn-out. This is particularly so as the expected respite after the pandemic was quickly replaced by the cost of energy crisis, the war in Ukraine and more recently the MOG changes. GIAA audits have found that the department remains alive to these issues and has proactively supported staff throughout.

Work is still ongoing to implement the internal audit actions issued by GIAA in 22-23. To date, 41% of actions due relating to 22-23 audits have been closed. Following the MOG changes announced in February 2023, teams across the department have required additional time to implement their internal audit actions due to changes in roles and responsibilities tied with resourcing constraints. The new departments and GIAA are working closely to ensure that remaining overdue actions are closed, and that remaining actions can be allocated to the new departments accordingly.

National Audit Office and the Public Accounts Committee

BEIS led on several key interventions on energy security and business and continued to lead on the government’s net zero commitment. Given the significance of these priorities, there was a continued increase in the quantity and pace of the National Audit Office’s BEIS non-financial audit activity resulting in 6 Public Account Committee (PAC) hearings involving BEIS witnesses between April 2022 and March 2023:

• 4 July – Measuring and reporting public sector greenhouse gas emissions
• 11 July – Regulation of energy suppliers
• 17 October – Workforce in the UK
• 5 December – ARA
• 27 February – Energy Bills Support
• 23 March – Decarbonising the Power Sector

BEIS provides responses to the PAC after each hearing via the HM Treasury minutes process, and twice a year via the HM Treasury minutes progress updates.

These are published on GOV.UK: HM Treasury minutes and HMT minutes progress report.

BEIS also provided responses to National Audit Office (NAO) recommendations, which are published on the NAO website.

Project assurance

A project assurance review is a key requirement within the department before submitting a business case for approval.

In 2022-23, programmes and projects continued to follow the department’s ‘integrated assurance and approvals framework’. In 2022-23, the department had 25 projects on Government Major Projects Portfolio (GMPP) an increase of 2 from last year. During 2022-23 there were 100 assurance reviews held.

Quality assurance of analytical models

We use analytical models to inform our policy making, evaluation and operations. We quality assure these models to ensure they are fit for purpose and comply with the government’s Analytical Quality Assurance (AQUA) Book. The ‘2022 NAO Value for Money Report Financial Modelling in Government’ highlighted our processes as demonstrating good practice.

During the year, we have had a churn of models coming into and going out of use. As at March 2023, over 90% of the 100 registered analytical models had the required very high level of assurance. Plans are in place to achieve the required level of assurance for all models. The Modelling Integrity Team has an active Monitoring system. The team recommends a range of timescales, that are suitable and proportionate to each model in question.

We also require partner organisations undertaking modelling to assure us that they have AQUA Book compliant QA processes.

Data protection

No personal data breaches were reported to the Information Commissioner’s Office (ICO). The BEIS data Controllership comprises the core department and 5 executive agencies – UK Space Agency, Met Office, UK Intellectual Property Office, Insolvency Service (excluding Official Receiver Offices & Office of the Adjudicator), and Companies House (excluding the registrar function).

We have worked closely with the Government Security Group (GSG) in the Cabinet Office shaping and piloting the new Cyber Assurance Framework. Defensive capability has evolved with the onboarding of a third party professional cyber incident response service, providing assistance in responding to a cyber-attack should the need arise. An overarching review of cyber governance is planned for 2023-24. We continue to work with the Government Property Agency to ensure adequate security at sites where we have staff.

Ministerial directions

Ministerial directions are formal, technical instructions from the Secretary of State which allow the department to proceed with a spending proposal in a situation where the accounting officer has raised an objection.

The accounting officer is accountable to Parliament for ensuring that all expenditure meets the standards under Managing Public Money (MPM). They have a duty to seek a direction if they believe 1 of the 4 accounting officer standards cannot be met – regularity, propriety, value for money and feasibility.

There were 2 ministerial directions during 2022-23.

Energy Price Guarantee

A ministerial direction was given, authorising the implementation of the Energy Price Guarantee scheme, the government intervention to temporarily reduce the cost of energy bills for domestic consumers. While the accounting officer considered the scheme necessary and urgent, it was judged that there was insufficient certainty that the accounting officer tests had been met. On feasibility, the urgency to implement the scheme meant that full enforcement powers would not be in place at the outset of the scheme. On propriety, it was noted that even small rates of fraud would have significant impacts on the public purse, given the scale of support. Finally, on value for money, many of the intended benefits could not be straightforwardly quantified, nor was it possible to fully evaluate how this intervention compared with potential alternatives. The ministerial direction was issued on 29 September 2022, instructing the accounting officer to proceed with the introduction of the scheme.

Energy Bill Relief Scheme

A ministerial direction was given, authorising the implementation of the Energy Bill Relief Scheme, the government intervention to temporarily reduce the cost of energy bills for businesses and public sector bodies. The accounting officer’s consideration was similar to that of the Energy Price Guarantee scheme. It was again considered necessary and urgent, but similar risks on feasibility, propriety, and value for money were raised. The ministerial direction was issued on 24 October 2022, instructing the accounting officer to proceed with the introduction of the scheme.

Effectiveness of our whistle blowing arrangements

Internal whistle blowing

We encourage our employees to speak up and raise a concern when they believe there may have been a wrongdoing or if something does not feel, look or sound right. This encouragement was reinforced throughout the year via senior management bulletins from our permanent secretary and chief people officer, at all-staff events, via our participation in the annual cross-Whitehall “Speak Up” campaign, in local-focused events and through messaging to senior civil servants (for cascading). Our procedures for raising concerns are accessible to all BEIS employees and we continue to offer 6 different routes to do this including via an external whistleblowing hotline. In 2022-23 we had no whistleblowing concerns raised by employees working in BEIS. The 2022 People Survey again highlighted that most BEIS employees had confidence that any concerns raised under the Civil Service Code would be properly investigated.

External whistle blowing

In the 2020-21 annual report, we noted that we had received nearly 2,000 reports from members of the public relating to the fraudulent acquisition or misuse of COVID-19 support funds provided through guaranteed loans and grants. These reached us through a government wide fraud hotline, supported by Crimestoppers.

In 2021-22, there were 1768 reports relating to COVID-19 schemes reported via the same route. The government wide COVID-19 hotline closed in September 2022 and reporting now comes directly into NATIS.

In 2022-23 there have been 1271 reports from members of the public relating to COVID-19. As the scheme ages it is expected that the numbers of reports will continue to fall.

On non-COVID-19 related issues, we did not receive any reports during 2022-23. We have recently reviewed and updated our whistleblowing policies and procedures.

Governance of BEIS’ public bodies

BEIS has a large number and diverse range of public bodies. Most of BEIS’ public bodies are governed by their own independent boards and have their own governance and internal assurance structures. Details of these can be found in their individual annual reports and accounts. The 28 bodies consolidated into the department’s accounts are all individually reviewed by the core department as part of the process to prepare the annual accounts.

In 2022-23, the core department received assurance on risks and delivery within the POs in the following ways:

• acted in line with the code of good practice - arm’s length body sponsorship code of good practice
• POs governance statements
• BEIS Partnership Assurance Framework
• advice and challenge from ARAC on assurance processes
• non-executive directors of the core department’s ARAC attended ARAC meetings of significant partner organisations - chairs from partner organisation ARACs are invited to observe the core department’s ARAC in return
• providing assurance to the executive board on the core department’s relationship with its bodies

Some POs have carried additional risks in terms of board appointments. The core department is looking at improvements which can be made to the process to mitigate this risk.

BEIS implemented the new Cabinet Office review programme across its public bodies in line with the Cabinet Office guidance. The UKRI report was published in June 2022. Reviews of Insolvency Service, Met Office, North Sea Transition Authority, Small Business Commissioner and Salix Finance Ltd have been undertaken in year 1 of the 3-year programme.

Accounting Officer’s conclusion

I have considered the evidence provided regarding the annual governance statement and the independent assurance provided by ARAC. BEIS received a ‘moderate’ opinion on the framework of governance, risk management and control within the department for 2022-23 from GIAA which was the same as the previous year.

Overall, I am satisfied that the department continued to embed an appropriate system of internal control and risk management during this reporting period and to improve and adapt its governance arrangements considering the risks being managed. This work will be continued in the 3 new departments that have been formed from BEIS following the machinery of government changes in February 2023.

Sarah Munby
Permanent Secretary and Principal Accounting Officer

10 October 2023

Staff report

Number of senior civil service staff by band

The table below shows the number of senior civil servants grouped by their salary bands. Salary band represent actual salary rates. Bonuses are not included. The numbers are based on the full year equivalent as at 31 March 2023. They include both permanent and fixed term contracts. It includes active workers only, and exclude inactive workers such as those on maternity leave, outward loans etc.

	As at 31 Mar 2023	As at 31 Mar 2022
£60,000 - £64,999	-	1
£65,000 - £69,999	1	1
£70,000 - £74,999	85	137
£75,000 - £79,999	94	57
£80,000 - £84,999	36	24
£85,000 - £89,999	18	11
£90,000 - £94,999	11	39
£95,000 - £99,999	35	11
£100,000 - £104,999	12	8
£105,000 - £109,999	3	4
£110,000 - £114,999	3	3
£115,000 - £119,999	2	1
£120,000 - £124,999	2	6
£125,000 - £129,999	4	1
£130,000 - £134,999	1	3
£135,000 - £139,999	5	3
£140,000 - £144, 999	2	1
£145,000 - £149,999	2	1
£150,000 - £154,999	2	1
£155,000 - £159,999	1	-
£160,000 - £164,999	-	2
£165,000 - £169,999	2	-
£180,000 - £184,999	-	2
£185,000 - £189,999	1	-
Total	322	317

Staff numbers (audited information)

The table below shows numbers based on the full year equivalent average. The figures include both permanent and fixed term contracts. It includes active workers only, and excluded inactive workers such as those on maternity leave, outward loans etc.

	Permanent employed staff	Others	Ministers	Special advisers	2022‑23 Total	2020‑21 Total
Core department	5,759	225	6	3	5,993	5,865
Agencies	3,050	214	-	-	3,264	3,028
Non departmental public bodies (NDPBs)	15,010	2,602	-	-	17,612	16,293
Total	23,819	3,041	6	3	26,869	25,186
Of which
– Core department and agencies	8,809	439	6	3	9,257	8,893
– NDPBs and other designated bodies	15,010	2,602	-	-	17,612	16,293
Total	23,819	3,041	6	3	26,869	25,186

Staff costs (audited information)

	Permanent employed staff £m	Others £m	2022‑23 Total £m	2020‑21 Total £m
Wages and salaries	1,187	152	1,339	1,221
Social security costs	131	-	131	158
Other pension costs	294	-	294	280
Sub total	1,612	152	1,764	1,659
Less recoveries in respect of outward secondments	(7)	(2)	(9)	(27)
Total net costs	1,605	150	1,755	1,632
Core department and agencies	555	43	598	560
NDPBs and other designated bodies	1,050	107	1,157	1,072
Total net costs	1,605	150	1,755	1,632

In the departmental group, £27,751,537 of staff costs were capitalised (2021–22: £23,831,552). And 482 employees were engaged on capital projects (2021–22: 510 employees).

Staff severance costs are included in wages and salaries. For further details on staff severance costs, see exit packages in the staff report.

Social security costs were lower than 2021-22 despite the increase in pay and pensions. This is due to a decrease in social security costs in UKRI by £40 million. This is explained in the UKRI annual report and accounts.

Total net costs of ‘others’ includes ministers’ total net costs of £346,124 (2021–22: £280,833).

Nuclear site licence companies – staff numbers and costs (audited information)

Staff costs for nuclear site licence companies (SLCs) are disclosed separately. They are included in the amounts shown for utilisation in the Nuclear Decommissioning Authority’s (NDA) nuclear decommissioning provision in note 20, rather than being reported as staff costs in the Statement of Comprehensive Net Expenditure (SOCNE).

	Permanent employed staff	Others	2022‑23 Total	2020‑21 Total
Number of staff (full time equivalent)	14,812	915	15,727	15,589
Costs
Wages and salaries (£m)	885	56	941	869
Social security costs (£m)	106	-	106	91
Other pension costs (£m)	178	-	178	172
Total costs (£m)	1,169	56	1,225	1,132

Principal Civil Service Pension Scheme

Nuclear site licence companies are not included in these pension schemes. The Principal Civil Service Pension Scheme (PCSPS) and the Civil Servant and Other Pension Scheme (CSOPS), known as “alpha”, are an unfunded multi-employer defined benefit scheme in which the department is unable to identify its share of the underlying assets and liabilities. The scheme actuary valued the PCSPS as at 31 March 2016. Further details can be found in the resource accounts of the Cabinet Office Civil Superannuation.

For 2022–23, employer contributions of £169,192,669 were payable to the PCSPS (2021–22: £155,482,772) at 1 of 4 rates in the range 26.6% to 30.3% (2021–22: 26.6% to 30.3%) of pensionable pay, based on salary bands.

The scheme’s actuary reviews employer contributions usually every 4 years following a full scheme valuation. The contribution rates are set to meet the cost of the benefits accruing during 2022–23 to be paid when the member retires and not the benefits paid during this period to existing pensioners.

Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employers’ contributions of £3,240,867 (2021–22: £1,387,160) were paid to one or more of the panel of 3 appointed stakeholder pension providers. Employer contributions are age-related and range from 8% to 14.75%. Employers also match employee contributions up to 3% of pensionable earnings. In addition, employer contributions of £19,635 (2021–22: £22,482), 0.5% (2021–22: 0.5%) were payable to the PCSPS to cover the cost of the future provision of lump sum benefits on death in service and ill health retirement of these employees.

Contributions due to/ (from) the partnership pension providers as at 31 March 2023 were £50,482 (2021–22: (£1,589)). Contributions prepaid at that date were £nil (2021–22: £nil).

Ill-health retirement

In 2022–23, 36 persons (2021–22: 30 persons) across the departmental group retired early on ill-health grounds; the total additional accrued pension liabilities in the year amounted to £2,507,360 (2021–22: £1,094,226).

Other pension schemes

Employer contributions to other pension schemes in 31 March 2023, amounted to £302,566,449 (2021–22: £295,072,090). Employer contributions include employers’ contributions, current service costs and where appropriate past service costs of funded pension schemes. Further details can be found in the accounts of the department’s NDPBs and other designated bodies. A list of these bodies is provided in note 28.

Staff composition

The table below shows staff composition as at 31 March 2023.^{[Note 1]}

The numbers are based on headcount and include both permanent and fixed term contracts. It includes active workers, and inactive workers such as those on maternity leave and outward loans. It excludes all contingent labour.

Gender

	2022‑23	2021‑22	2020‑21
All employees	6,286	6,009	5,210
– Men	50%	50%	51%
– Women	50%	50%	49%
Senior civil servants	346	336	313
– Men	49%	51%	56%
– Women	51%	49%	44%
Executive committee [Note 2]	20	19	16
– Men	50%	58%	63%
– Women	50%	42%	38%

Disability

	2022‑23	2021‑22	2020‑21
Declaration rate	84%	87%	83%
Representation:
– No	83%	83%	83%
– Yes	11%	11%	11%
– Prefer not to say	6%	6%	6%

Ethnicity

	2022‑23	2021‑22	2020‑21
Declaration rate	89%	92%	89%
Representation:
– White	71%	71%	73%
– BAME	24%	24%	22%
– Prefer not to say	5%	5%	5%

Sexual orientation

	2022‑23	2021‑22	2020‑21
Declaration rate	89%	92%	89%
Representation:
– Straight	81%	81%	80%
– LGBT+	9%	9%	10%
– Prefer not to say	10%	10%	10%

Notes:

1. The figures differ from staff numbers on page 96. They align with staff numbers in the Annual Civil Service Employee Survey (ACSES), based on ONS definitions.
2. For the gender table only, 2020-21 figures were FTE, and from 2021-22 changed to headcount. But this does not have a significant impact on the overall % splits.

Sickness absence data

The table below shows average working days lost to sickness absence. Disclosures for our executive agencies can be found in their annual report and accounts.

	2022‑23	2021‑22
Core department	3.8	3.4

Staff turnover percentage

The table below shows the staff turnover percentage in 2022-23 for the core department and agencies, as defined for the Civil Service statistics collection.

Departmental turnover includes employee who left the department. While turnover refers those who also left the Civil Service.

We continued to actively monitor turnover. The department has seen major structural changes in the 2022-23 period, influencing turnover. The workforce has continued to expand and grow in various sectors including energy and net zero. Internal and external factors play a part in the causes for turnover.

	2022‑23 Departmental turnover	2022‑23 Turnover	2021‑22 Departmental turnover	2021‑22 Turnover
Core Department	17.0%	8.8%	14.9%	6.1%
UK Space Agency	24.0%	12.0%	26.9%	13.8%
Companies House	11.6%	8.5%	11.3%	7.4%
Insolvency service	10.3%	5.8%	10.4%	5.4%
ACAS	10.9%	8.3%	10.7%	6.1%
UK Intellectual Property Office	7.3%	5.7%	6.5%	4.4%
Met Office	7.6%	7.2%	10.2%	10.2%

Civil service people survey staff engagement scores

	2022	2021	2020	2019
Engagement score	61%	67%	65%	62%

In the People Survey 2022, BEIS achieved a response rate of 85%.

We had an engagement index of 61%, which is a decrease from the People Survey undertaken in 2021, by 6 percentage points. The outcomes for all 9 themes that underpin the survey declined, and notably the lowest scoring areas were pay and benefits, leadership and managing change and learning and development.

The department put in place a series of focus groups to gain greater understanding on the above themes in January and local action plans have been delivered to focus on key impacts at team level. Across the department, and as part of the Machinery of Government transition, departmental action plans are being shaped to ensure a stronger focus on departmental purpose and objectives, develop leadership capability, engage colleagues in the future reward strategy and champion learning and development.

Staff policies applied for disabled persons

Supporting disabled people at recruitment and throughout their employment is important to BEIS.

Applications for employment

We are accredited under the Disability Confident Leader scheme.

Continuing employment

We offer reasonable adjustments where practical for both office and home working environments. We support disabled staff or staff with long-term health conditions by carrying out assessments, providing equipment and training. We work closely with our ‘Capability Action’ staff network.

Training, career development and promotion

Disabled participants of the Future Leaders Scheme (FLS) are offered additional support through the Disability Empowers Leadership Talent (DELTA) scheme. DELTA is an accelerated development programme aimed at supporting disabled participants.

Trade union facility time

Facility time is time off for employees who are trade union (TU) representatives to carry out their TU roles. TU roles may be duties or activities. Reps are entitled to paid time off to carry out trade union duties. They are not entitled to paid time off for trade union activities. However, an employer can choose to pay for time off for activities.

	Core department and agencies	Other agencies not consolidated in the group accounts	2022‑23 Total
Relevant union officials
Number of trade union representatives employed	51	44	95
Full-time equivalent	46	41	87
Percentage of time spent on facility time Working hours each representative spent on facility time
0% of working hours	1	2	3
1 - 50% of working hours	50	42	92
Percentage of pay bill spent on facility time Pay bill refers to the total for all employees, not union representatives only
Total cost of facility time (£)	£142,782	£144,038	£286,820
Total pay bill (£m)	£559	£241	£800
Facility time as a % of pay bill	0.02%	0.06%	0.04%
Paid trade union activities (Hours spent on paid trade union activities ÷ total paid facility time hours) * 100	0.00%	0.00%	0.00%

Health, safety, and wellbeing

We have a strong record in providing a safe and supportive work environment. In 2022-23, there were no reported accidents within ‘Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013’.

We ensure staff are safe in every location they work, from both office and from home. We ensure staff have the correct equipment and training to carry out their duties with all the considerations for hybrid working. The department continued to ensure that office working environments are accessible, as far as reasonably practicable. For staff activities that required risk assessments, appropriate controls and risk management were in place.

We are supportive of staff wellbeing. The wellbeing offer includes resilience training, stress management, mental health, health campaigns and disability awareness. Staff have access to the Employee Assistance Programme for confidential counselling and advice on work and life issues. We also had 300 Mental Health First Aiders to provide signposting support.

Diversity and inclusion

Diversity and Inclusion matter to BEIS. We make the most of differences to solve important, and complex policy issues facing the country, business, and the environment. During the year we have:

• met local goals for increasing the diversity of our workforce and worked with teams to refresh these goals
• completed delivery of our 3-year diversity and inclusion strategy
• continued to support our staff networks – and have supported the development of networks in the new departments following Machinery of Government changes
• maintained a high ‘inclusion and fair treatment’ score in the 2022 People Survey at 83%
• continued to promote public sector equality duty obligations through regular training and providing bespoke support across policy areas

Staff redeployments

The table below shows the number of staff loaned and hosted as at 31 March 2023.

Staff loaned (outward staff loans) were staff permanently employed by the core department, who were on loan to another organisation. Staff hosted (inward staff loans) were those attached to the core department, who were on loan from other organisations.

As the home department, short-term costs relating to outward staff loans were charged to the administration budget, if the core department paid the cost. As the host department, short-term costs relating to inward staff loans were charged to the administration budget, if the core department paid the cost.

The department does not currently hold information centrally to support the disclosure of average likely durations of redeployments.

Loans in

	Non-Payroll Short term	Non-Payroll Long term	Payroll Short term	Payroll Long term	Total Short term	Total Long term
AO	-	1	-	-	-	1
EO	-	2	-	2	-	4
FAST	-	8	-	-	-	8
G6	1	7	-	15	1	22
G7	3	22	-	23	3	45
HEO	1	5	-	19	1	24
SCS1	-	1	-	4	-	5
SCS2	-	2	1	2	1	4
SCS3	-	1	-	-	-	1
SEO	1	3	1	32	2	35
Total	6	52	2	97	8	149

Loans out

	Loan Out - Non Pay Short term	Loan Out - Non Pay Long term	Loan Out - Payroll Short term	Loan Out - Payroll Long term	Total Short term	Total Long term
AO	-	1	-	-	-	1
EO	-	6	-	-	-	6
FAST	2	2	-	-	2	2
G6	-	12	-	-	-	12
G7	-	46	-	-	-	46
HEO	-	32	1	-	1	32
SCS1	-	8	-	-	-	8
SCS2	-	2	-	-	-	2
SEO	-	16	-	-	-	16
Total	2	125	1	-	3	125

Consultancy and temporary staff expenditure

The departmental group’s expenditure on consultancy in 2022–23 was £177.9 million (2021‑22: £174.3 million). The consultancy expenditure of executive agencies was £5.7 million (2021–22: £8.2 million) and the consultancy expenditure relating to arm’s length bodies was £65.8 million (2021–22: £67.2 million) of which £32.3 million (2021–22: £27.5 million) was related to SLCs.

Consultants are hired to work on projects in a number of specific situations:

• where the department does not have the skill set required
• where the requirement falls outside the core business of civil servants
• where an external, independent perspective is required

When used appropriately, consultancy can be a cost effective and efficient way of getting the temporary and skilled external input that the department needs.

The departmental group’s expenditure on temporary staff in 2022–23 was £149.8 million (2021–22: £106.3 million), as detailed in the staff costs note below. We are committed to the consistent application of the Cabinet Office’s 2010 controls on consultancy and other spending.

Off-payroll engagements

Off-payroll engagements refer to workers paid off-payroll, without deducting tax and national insurance at source, typically contractors.

SLCs are subsidiaries of the NDA and fall within the departmental accounting boundary. But they operate with a high degree of autonomy. SLCs high number of off-payroll workers represent a small proportion of the overall workforce. There is a need to bring in unique skills and experience which cannot be found in-house due to the specialised, project driven, nature of their work.

Table 1: Highly paid off-payroll worker engagements as at 31 March 2023, earning £245 per day or greater

	Core department	Agencies	Others in the departmental group (no SLCs)	Others in the departmental group (SLCs only)	Entities outside the departmental group
No. of existing engagements as of 31 Mar 2023	121	246	833	129	4
Of which, no. that existed for
– less than 1 year	89	162	431	15	2
– between 1 and 2 years	5	62	201	25	-
– between 2 and 3 years	6	14	85	17	-
– between 3 and 4 years	-	2	42	15	1
– 4 or more years	21	6	74	57	1

Table 2: All highly paid off-payroll workers engaged at any point during the year ended 31 March 2023, earning £245 per day or greater

	Core department	Agencies	Others in the departmental group (no SLCs)	Others in the departmental group (SLCs only)	Entities outside the departmental group
No. of temporary off-payroll workers engaged during the year ended 31 March 2023	223	289	1,153	177	6
Of which
– Not subject to off-payroll legislation	154	66	374	17	-
– Subject to off-payroll legislation and determined as in-scope of IR35	7	142	598	90	-
– Subject to off-payroll legislation and determined as out-of-scope of IR35	62	81	181	70	6
– No. of engagements reassessed for compliance or assurance purposes during the year	-	95	15	64	-
Of which: – No. of engagements that saw a change to IR35 status following review	-	-	1	10	-

Table 3: For any off-payroll engagements of board members, and/or, senior officials with significant financial responsibility, between 1 April 2022 and 31 March 2023

	Core department	Agencies	Others in the departmental group (no SLCs)	Others in the departmental group (SLCs only)	Entities outside the departmental group
No. of off-payroll engagements of board members, and/or, senior officials with significant financial responsibility, during the financial year	-	-	8	-	3
Total no. of individuals on pay-roll and off-payroll that have been deemed ‘board members and/or senior officials with significant financial responsibility’, during the financial year. This figure should include both on payroll and off-payroll engagements.	35	-	133	5	21

Details of the exceptional circumstances that led to the off-payroll engagement of board members/ senior officials with significant financial responsibility

Competition Appeal Tribunal/ Competition Service

• The president of the Competition Appeal Tribunal (CAT) is the chair of the board and paid by the Ministry of Justice (MOJ) and is on the MOJ payroll. However, the salary, Earning Related National Insurance Contributions (ERNIC), and Judicial Pension Scheme employer contributions are invoiced to the CAT

AEA Insurance Ltd

AEA Insurance Ltd (AEAIL) is a captive insurance company registered in the Isle of Man and subject to their tax and NI legislation. AEAIL does not employ anyone, so AEAIL directors are off-payroll by default.

• Off-payroll director 1: Engagement term = 21/03/2002 to 31/03/2023 = 21 years
• Off-payroll director 2: Engagement term = 13/01/2022 to 31/03/2023 = 1 year

Companies House

• One director of digital retained on an interim basis. She was secured to fill the role on an interim basis following the withdrawal of the identified candidate at very short notice

UK Research Innovation

• One chief executive officer and 3 executive chairs. They remain on their organisations’ payrolls and UKRI reimburse their organisations
• One chief people officer retained on a consultancy basis. He was secured to fill the role on an interim basis following the permanent occupant leaving ahead of the conclusion of their fixed term appointment

Small Business Commissioner

• The 3 off-payroll persons are non-executive directors (NEDs). They are contracted to work for 8 days a year and paid a daily rate
• Two of the NEDs were appointed in Jan 2019 and have come to the end of the appointment after 4 years
• The third NED was appointed in October 2019, and their appointment ends in October 2023

Exit packages - Civil Service and other compensation schemes (audited information)

Redundancy and other departure costs have been paid in accordance with the provisions of the Civil Service Compensation Scheme (CSCS), a statutory scheme made under the Superannuation Act 1972.

Where the department has agreed early retirements, the additional costs are met by the department and not by the Civil Service pension scheme. Ill-health retirement costs are met by the pension scheme and are not included in the table.

The table below shows the total cost of exit packages agreed and accounted for in 2022–23. £4,342,424 exit costs were paid in 2022–23, the year of departure (2021–22: £5,436,515).

2022–23

	Number of compulsory redundancies	Number of other departures agreed	Total number of exit packages by cost band
Less than £10,000	4	43	47
£10,000 - £25,000	9	28	37
£25,000 - £50,000	9	13	22
£50,000 - £100,000	-	42	42
£100,000 - £150,000	-	3	3
£150,000 - £200,000	1	-	1
Total number	23	129	152
Of which
– Core department and agencies	-	41	41
– NDPBs and other designated bodies	23	88	111
Total number	23	129	152
Total cost (£)	691,037	4,974,676	5,665,712
Of which
– Core department and agencies	-	2,705,030	2,705,030
– NDPBs and other designated bodies	691,037	2,269,645	2,960,682
Total cost (£)	691,037	4,974,676	5,665,712

2021–22

	Number of compulsory redundancies	Number of other departures agreed	Total number of exit packages by cost band
Less than £10,000	3	16	19
£10,000 - £25,000	6	33	39
£25,000 - £50,000	3	17	20
£50,000 - £100,000	3	17	20
£100,000 - £150,000	-	-	-
£150,000 - £200,000	-	1	1
Total number	15	84	99
Of which
– Core department and agencies	-	8	8
– NDPBs and other designated bodies	15	76	91
Total number	15	84	99
Total cost (£)	416,253	2,765,946	3,182,199
Of which
– Core department and agencies	-	452,940	452,940
– NDPBs and other designated bodies	416,253	2,313,006	2,729,259
Total cost (£)	416,253	2,765,946	3,182,199

Remuneration report

Overview

The remuneration report sets out the remuneration policy and the amounts awarded to BEIS ministers and directors. Just like the staff report, it is fundamental to demonstrating transparency and accountability to Parliament.

Service contracts

The Constitutional Reform and Governance Act 2010 requires Civil Service appointments to be made on merit on the basis of fair and open competition. The recruitment principles published by the Civil Service Commission specify the circumstances under which appointments may otherwise be made.

Unless stated otherwise below, the officials covered by this report hold appointments which are open-ended. Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil Service Compensation Scheme.

Further information about the work of the Civil Service Commission can be found on the Civil Service Commission website.

Remuneration policy

Ministers

Remuneration of ministers is determined in accordance with the provisions of the Ministerial and other Salaries Act 1975 (as amended by The Ministerial and other Salaries Order 1996) and the Ministerial and other Pensions and Salaries Act 1991.

Executive directors/ senior officials

The Senior Salaries Review Body provides independent advice to the Prime Minister on the remuneration of senior civil servants. The review body considers economic considerations such as local variations in labour markets and funds available to departments.

Further information about the work of the review body can be found at Senior Salaries Review Body.

Ministers – single total figure of remuneration (audited information)

The table below shows each component, and the single total figure of remuneration for each minister in 2022-23.

Where ministers have moved to or from another department during the year, details of any remuneration relating to their subsequent or prior roles will be in that department’s remuneration report. Ministers who transfer from another department continue being paid at the appropriate rate of pay with effect from the first day of the month following the date of appointment. Former ministers who transfer to other departments are paid at their current rate of pay up to the end of the month. Any increase in ministers’ salaries on transfer from the date of appointment is paid by their new department.

Secretary of State

	2022‑23 Salary [Note 1] (£)	2022‑23 Full year equivalent salary if different (£)	2022‑23 Pension benefits [Note 2] (to nearest £1,000)	2022‑23 Total (to nearest £1,000)	2021‑22 Salary [Note 1] (£)	2021‑22 Full year equivalent salary if different (£)	2021‑22 Pension benefits [Note 2] (to nearest £1,000)	2021‑22 Total (to nearest £1,000)
The Rt Hon Grant Shapps MP (from 25 Oct 2022) [Note 3]	29,397	67,505	7,000	36,000	-	-	-	-
The Rt Hon Jacob Rees-Mogg MP (from 6 Sep 2022 to 25 Oct 2022) [Note 4]	21,231	67,505	-	21,000	-	-	-	-
Rt Hon Kwasi Kwarteng MP (to 5 Sep 2022)	33,753	67,505	7,000	41,000	67,505	-	17,000	85,000

Ministers of State

	2022‑23 Salary [Note 1] (£)	2022‑23 Full year equivalent salary if different (£)	2022‑23 Pension benefits [Note 2] (to nearest £1,000)	2022‑23 Total (to nearest £1,000)	2021‑22 Salary [Note 1] (£)	2021‑22 Full year equivalent salary if different (£)	2021‑22 Pension benefits [Note 2] (to nearest £1,000)	2021‑22 Total (to nearest £1,000)
Graham Stuart MP (from 6 Sep 2022) [Note 5]	15,840	31,680	9,000	25,000	-	-	-	-
George Freeman MP (from 26 Oct 2022) [Note 6]	25,319	31,680	5,000	30,000	12,058	22,375	3,000	15,000
Jackie Doyle-Price MP (from 7 Sep 2022 to 27 Oct 2022) [Note 7]	12,161	31,680	1,000	13,000	-	-	-	-
Nusrat Ghani MP (from 7 Sep 2022 to 6 Feb 2023) [Note 8]	17,952	31,680	3,000	21,000	-	-	-	-
Lord Grimstone (to 6 July 2022) [Note 9]	-	-	-	-	-	-	-	-
Rt Hon Greg Hands MP (to 6 Sep 2022) [Note 10]	21,648	31,680	3,000	25,000	15,840	31,680	5,000	21,000

Parliamentary Under-Secretaries of State

	2022‑23 Salary [Note 1] (£)	2022‑23 Full year equivalent salary if different (£)	2022‑23 Pension benefits [Note 2] (to nearest £1,000)	2022‑23 Total (to nearest £1,000)	2021‑22 Salary [Note 1] (£)	2021‑22 Full year equivalent salary if different (£)	2021‑22 Pension benefits [Note 2] (to nearest £1,000)	2021‑22 Total (to nearest £1,000)
Lord Callanan [Note 11]	107,335	-	20,000	127,000	107,335	-	18,000	125,000
Paul Scully MP (to 6 July 2022)[Note 12,17]	7,458	22,375	1,000	8,000	22,375	-	6,000	28,000
Amanda Solloway MP [Note 17]	-	-	-	-	11,187	22,375	2,000	13,000
Kevin Hollinrake MP (from 28 Oct 2022 to 6 Feb 2023) [Note 13]	9,624	22,375	1,000	11,000	-	-	-	-
Dean Russell MP (from 20 Sep 2022 to 27 Oct 2022) [Note 14]	7,841	22,375	-	8,000	-	-	-	-
Jane Hunt MP (from 8 Jul 2022 to 8 Sep 2022) [Note 15]	9,398	22,375	1,000	10,000	-	-	-	-
Lee Rowley MP (to 6 Jul 2022) [Note 16]	-	-	-	-	-	-	-	-

Notes:

1. Salary information excludes employers’ national insurance contributions. None of the ministers of the department received benefits in kind during the year. Minsters in the House of Commons are remunerated on a different basis to those in the House of Lords as explained in notes to the remuneration report.
2. The value of pension benefits accrued during the year is calculated as (real increase in pension multiplied by 20) less (contributions made by the individual). Real increase excludes increases due to inflation or any increase or decrease due to transfer of pension rights.
3. Secretary of State for Department for Energy Security and Net Zero (DESNZ) from 7 February 2023, from BEIS following the Machinery of Government announcement. Previously Secretary of State for the Home Office before joining BEIS on 25 October 2022.
4. Salary includes £16,876 statutory payment on cessation of Ministerial office.
5. Previously Minister of State for Foreign, Commonwealth and Development Office (FCDO), prior to joining BEIS 6 September 2022.
6. Minister of State for Department for Science, Innovation and Technology (DSIT) from 7 February 2023, from BEIS following the Machinery of Government announcement. Previously Minister of State for BEIS, from 26 October 2022. Salary includes £7,920 statutory payment on cessation of Ministerial office, as Parliamentary Under Secretary, from 7 September 2021 to 7 July 2022.
7. Salary includes £7,920 statutory payment on cessation of Ministerial office.
8. Minister of State transferred to Department for Business and Trade (DBT ) and the Cabinet Office jointly from 7 February 2023, from BEIS following the Machinery of Government announcement Joined BEIS 7 September 2022.
9. Minister of State jointly with Department for International Trade (DIT).
10. Salary includes £7,920 statutory payment on cessation of Ministerial office.
11. Parliamentary Under Secretary for DESNZ from 7 February 2023, from BEIS following the Machinery of Government announcement. Salary includes £36,366 Lords Office Holders Allowance.
12. Parliamentary Under Secretary for DSIT from 7 February 2023, following the Machinery of Government announcement. Previously Minister of State at the Department for Digital, Culture, Media and Sport (DCMS). Jointly Parliamentary Under Secretary of State in BEIS and Minister for London, from 14 February 2020 to 6 July 2022.
13. Parliamentary Under Secretary of State for DBT from 7 February 2023, from BEIS following the Machinery of Government announcement.
14. Salary includes £5,593 statutory payment on cessation of Ministerial office.
15. Salary includes £5,593 statutory payment on cessation of Ministerial office.
16. Parliamentary Under-Secretary for the BEIS and Government Whip, Lord Commissioner of HM Treasury; paid by HM Treasury.
17. The following ministers transferred to BEIS’ successor departments following the Machinery of Government announcement. These individuals were not remunerated by BEIS in February or March 2023 but were paid by their previous department and the details of this can be found in their published accounts. These have been disclosed here for completeness.

• The Rt Hon Michelle Donelan MP (Secretary of State for DSIT ) - joined on 7 February 2023 from DCMS
• Julia Lopez MP (Minister of State for DSIT) - joined on 7 March 2023 and will undertake a joint role with DCMS.
• Paul Scully MP (Parliamentary Under Secretary of State for DSIT) - joined on 7 February 2023 from DCMS. Remuneration disclosed in the table above relates to the minister’s previous tenure at BEIS to 6 July 2022.
• Andrew Bowie MP (Parliamentary Under Secretary of State for DESNZ) - joined on 7 February 2023 from DIT.
• Viscount Camrose (Parliamentary Under Secretary of State for DSIT) - joined on 7 March 2023 in his first ministerial posting.
• Amanda Solloway MP - (Parliamentary Under Secretary of State for DESNZ) - joined on 7 February 2023. The minister has been included in the table above to disclose the prior year comparative remuneration but was not remunerated by BEIS for her tenure between 7 February and 31 March 2023.

Ministers – pension benefits (audited information)

The table below shows the pension entitlements for each minister.

Secretary of State

	Pension benefits at age 65 as at 31 March 2023 £’000	Real increase in pension at age 65 £’000	CETV at 31 March 2023 [Note 1] £’000	CETV at 31 March 2022 [Note 1] £’000	Real increase in CETV £’000
Rt Hon Kwasi Kwarteng MP (to 5 Sep 2022)	0-5	0-2.5	40	32	3
The Rt Hon Jacob Rees-Mogg MP (from 6 Sep 2022 to 25 Oct 2022) [Note 2]	-	-	-	-	-
The Rt Hon Grant Shapps MP (from 25 Oct 2022)	5-10	0-2.5	117	105	4

Ministers of State

	Pension benefits at age 65 as at 31 March 2023 £’000	Real increase in pension at age 65 £’000	CETV at 31 March 2023 [Note 1] £’000	CETV at 31 March 2022 [Note 1] £’000	Real increase in CETV £’000
Lord Grimstone (to 6 July 2022) [Note 3]	-	-	-	-	-
Rt Hon Greg Hands MP (to 6 Sep 2022)	5-10	0-2.5	100	93	2
Nusrat Ghani MP (from 7 Sep 2022 to 6 Feb 2023)	0-5	0-2.5	14	10	2
Jackie Doyle-Price MP (from 7 Sep 2022 to 27 Oct 2022)	0-5	0-2.5	25	23	1
Graham Stuart MP (from 6 Sep 2022)	5-10	0-2.5	88	72	7
George Freeman MP (from 26 Oct 2022)	0-5	0-2.5	57	50	3

Parliamentary Under-Secretaries of State

	Pension benefits at age 65 as at 31 March 2023 £’000	Real increase in pension at age 65 £’000	CETV at 31 March 2023 [Note 1] £’000	CETV at 31 March 2022 [Note 1] £’000	Real increase in CETV £’000
Lord Callanan	5-10	0-2.5	145	109	15
Paul Scully MP (to 6 Jul 2022, from 7 Feb 2023)	0-5	0-2.5	14	12	1
Lee Rowley MP (to 6 Jul 2022) [Note 3]	-	-	-	-	-
Amanda Solloway MP (from 7 Feb 2023)	-	-	-	10	-
Kevin Hollinrake MP (from 28 Oct 2022 to 6 Feb 2023)	0-5	0-2.5	2	-	1
Dean Russell MP (from 20 Sep 2022 to 27 Oct 2022)	0-5	0-2.5	-	-	-
Jane Hunt MP (from 8 Jul 2022 to 8 Sep 2022)	0-5	0-2.5	1	-	1

Notes:

1. Where ministers joined or left during the year, their CETV opening or closing amounts are as at their joining or leaving dates. See Notes to the Remuneration report for explanation of CETV.
2. The Minister has opted out of the Pension Scheme in 2019.
3. Does not draw salary or pension benefits.

Senior officials – single total figure of remuneration (audited information)

The table below shows each component, and the single total figure of remuneration for each senior official in 2022-23. Senior officials comprise members of the executive committee.

Where officials have moved to or from a similar senior role in another department during the year, details of any remuneration relating to their subsequent or prior roles will be in that department’s remuneration report.

Permanent secretary

	2022‑23 Salary [Note 1] (£’000)	2022‑23 Full year equivalent salary if different (£’000)	2022‑23 Bonus (£’000)	2022‑23 Pension [Note 2] (to nearest £1,000)	2022‑23 Total (£’000)	2021‑22 Salary [Note 1] (£’000)	2021‑22 Full year equivalent salary if different (£’000)	2021‑22 Bonus (£’000)	2021‑22 Pension [Note 2] (to nearest £1,000)	2021‑22 Total (£’000)
Sarah Munby [Note 3]	165-170	-	-	64	225-230	160-165	-	-	62	220-225
Jeremy Pocklington (from 7 Feb 2023) [Note 4]	20-25	165-170	-	-4	20-25	-	-	-	-	-
Clive Maxwell (from 21 Nov 2022) [Note 5]	60-65	165-170	-	27	85-90	-	-	-	-	-

Director general

	2022‑23 Salary [Note 1] (£’000)	2022‑23 Full year equivalent salary if different (£’000)	2022‑23 Bonus (£’000)	2022‑23 Pension [Note 2] (to nearest £1,000)	2022‑23 Total (£’000)	2021‑22 Salary [Note 1] (£’000)	2021‑22 Full year equivalent salary if different (£’000)	2021‑22 Bonus (£’000)	2021‑22 Pension [Note 2] (to nearest £1,000)	2021‑22 Total (£’000)
David Bickerton [Note 6]	135-140	-	0-5	-	135-140	85-90	130-135	-	-	85-90
Caleb Deeks [Note 26]	85-90	125-130	5-10	29	120-125	25-30	80-85	-	18	40-45
Freya Guinness [Note 7]	150-155	-	0-5	22	175-180	140-145	145-150	-	58	195-200
Ashley Ibbett [Note 8]	125-130	-	0-5	26	155-160	120-125	-	-	54	170-175
Beatrice Kilroy-Nolan (from 11 Oct 2022) [Note 9]	-	-	-	-	-	-	-	-	-	-
Gavin Lambert [Note 6]	85-90	125-130	5-10	3	95-100	25-30	85-90	-	24	45-50
Lee McDonough [Note 8]	135-140	-	5-10	-62	80-85	105-110	130-135	-	13	120-125
Madelaine McTernan (to 15 Jan 2023) [Note 10]	55-60	180-185	-	25	80-85	180-185	-	-	-	180-185
Jonathan Mills (from 6 Jun 2022) [Note 11]	115-120	140-145	0-5	-6	110-115	-	-	-	-	-
Paul Monks [Note 8]	105-110	135-140	0-5	42	150-155	105-110	-	-	41	145-150
Ben Rimmington [Note 8]	125-130	-	0-5	4	130-135	90-95	120-125	-	89	175-180
Jo Shanmugalingam [Note 7]	120-125	130-135	5-10	3	130-135	110-115	-	5-10	30	145-150
Joanna Whittington (to 1 Dec 2022)	110-115	165-170	5-10	3	120-125	160-165	-	5-10	44	210-215

Director

	2022‑23 Salary [Note 1] (£’000)	2022‑23 Full year equivalent salary if different (£’000)	2022‑23 Bonus (£’000)	2022‑23 Pension [Note 2] (to nearest £1,000)	2022‑23 Total (£’000)	2021‑22 Salary [Note 1] (£’000)	2021‑22 Full year equivalent salary if different (£’000)	2021‑22 Bonus (£’000)	2021‑22 Pension [Note 2] (to nearest £1,000)	2021‑22 Total (£’000)
Simon Hulme [Notes 12,16]	150-155	145-150	-	58	205-210	180-185	-	-	69	245-250
Alice Hurrell [Note 12]	120-125	-	5-10	7	135-140	120-125	-	5-10	23	150-155
Donna Leong (from 6 Jun 2022) [Note 13]	75-80	95-100	-	3	80-85	-	-	-	-	-
Dan Micklethwaite [Note 12]	100-105	-	0-5	15	120-125	100-105	-	0-5	33	135-140
Abigail Morris [Note 14]	120-125	115-120	0-5	33	155-160	70-75	110-115	0-5	-	75-80
Tim Sparrow (from 8 Sep 2022) [Note 15]	15-20	105-110	-	5	20-25	-	-	-	-	-
Tom Taylor (to 12 Feb 2023)	115-120	130-135	5-10	-9	110-115	130-135	-	5-10	27	165-170

Notes:

1. Salary information excludes employers’ national insurance contributions. Departure costs have been paid in accordance with the provisions of the Civil Service Compensation Scheme, a statutory scheme made under the Superannuation Act 1972. Exit costs are accounted for in full in the year of departure. Where officials have moved to or from a similar senior role in another department during the year, details of any remuneration relating to their subsequent or prior roles will be in that department’s remuneration report.
2. The value of pension benefits accrued during the year is calculated as (real increase in pension multiplied by 20) plus (real increase in any lump sum) less (contributions made by the individual). Real increase excludes increases due to inflation or any increase or decrease due to transfer of pension rights.
3. Permanent Secretary for Department for Science, Innovation and Technology (DSIT) from 7 February 2023, from BEIS following the Machinery of Government announcement.
4. Permanent Secretary for Department for Energy Security and Net Zero (DESNZ) from 7 February 2023, following the Machinery of Government announcement. Previously Permanent Secretary at the Department for Levelling Up, Housing and Communities (DLUHC).
5. Second Permanent Secretary for DESNZ from 7 February 2023, from BEIS following the Machinery of Government announcement. Appointed second Permanent Secretary for BEIS from 21 November 2022, previously Director General at the Department for Transport (DFT).
6. Director General, Department for Business and Trade (DBT) from 7 February 2023, from BEIS following the Machinery of Government announcement.
7. Director General, DSIT from 7 February 2023, from BEIS following the Machinery of Government announcement.
8. Director General, DESNZ from 7 February 2023, from BEIS following the Machinery of Government announcement.
9. On loan from the Cabinet Office.
10. Appointed as a permanent director general at BEIS from 8 September 2022. Previously on secondment from UK Government Investments (UKGI), from 1 January 2021 to 7 September 2022, where BEIS paid Ms McTernan’s remuneration by Invoice.
11. Director General, DESNZ from 7 February 2023, from BEIS following the Machinery of Government announcement. Previously Director General at the Department for Work and Pensions (DWP).
12. Director, DESNZ from 7 February 2023, from BEIS following the Machinery of Government announcement.
13. Director, DESNZ from 7 February 2023, from BEIS following the Machinery of Government announcement. Joined BEIS Executive Committee in June 2022.
14. Director, DSIT from 7 February 2023, from BEIS following the Machinery of Government announcement. Salary in 2022/23 includes pay arrears paid in April 2022.
15. Director and Chief Financial Officer for D S I T from 13 February 2023, from BEIS following the Machinery of Government announcement. Previously Director at the Department for Digital, Culture, Media and Sport (DCMS). Joined ExCo on 7 February 2023.
16. Basic salary includes April pay at higher salary point before movement to new contract.
17. The following senior officers below transferred to BEIS’ successor departments following the Machinery of Government announcement. These individuals were not remunerated by BEIS in February or March 2023 but were paid by their previous department. These have therefore not been included in the remuneration table above but have been disclosed here as a footnote for completeness.

• Susannah Storey - Director General, DSIT from 7 February 2023. Previously Director General at DCMS. Remuneration details can be found in their published accounts.
• David Thomas - Director and Chief Financial Officer for DESNZ from 20 March 2023. Previously Director at DLUHC

Senior officials – pension benefits (audited information)

The table below shows the pension entitlements for each senior official for the year ending 2023. Senior officials comprise members of the executive committee.

Permanent secretary

	Accrued pension at pension age as at 31 March 2023 and related lump sum (£’000)	Real increase in pension and related lump sum at pension age [Note 5] (£’000)	CETV at 31 March 2023 [Note 1] (£’000)	CETV at 31 March 2022 [Note 1] (£’000)	Real increase in CETV (£’000)	Employer contribution to partnership pension account (Nearest £100)
Sarah Munby	10-15	2.5-5	123	84	22	-
Jeremy Pocklington (from 7 Feb 2023)	70 - 75 plus a lump sum of 30 - 35	a decrease of 0 - 2.5 and a decrease in lump sum of 0 - 2.5	1,098	1,091	(6) [Note 4]	-
Clive Maxwell (from 21 Nov 2022)	75 - 80 plus a lump sum of 135 - 140	0 - 2.5 plus a lump sum of 0 - 2.5	1,270	1,218	15	-

Director general

	Accrued pension at pension age as at 31 March 2023 and related lump sum (£’000)	Real increase in pension and related lump sum at pension age [Note 5] (£’000)	CETV at 31 March 2023 [Note 1] (£’000)	CETV at 31 March 2022 [Note 1] (£’000)	Real increase in CETV (£’000)	Employer contribution to partnership pension account (Nearest £100)
David Bickerton [Note 2]	-	-	-	-	-	-
Caleb Deeks	40 - 45	0 - 2.5	516	454	10	-
Freya Guinness	50 - 55	0 - 2.5	744	683	11	-
Ashley Ibbett	45 - 50 plus a lump sum of 85 - 90	0 - 2.5 plus a decrease in lump sum of 2.5 - 5	811	720	6	-
Beatrice Kilroy-Nolan (from 11 Oct 2022) [Note 3]	-	-	-	-	-	-
Gavin Lambert	35 - 40 plus a lump sum of 55 - 60	0 - 2.5 plus a decrease in lump sum of 2.5 - 5	540	491	(7) [Note 4]	-
Lee McDonough	55 - 60 plus a lump sum of 145 - 150	a decrease of 0 - 2.5 plus a decrease in lump sum of 12.5 - 15	1,303	1,251	(82) [Note 4]	-
Madelaine McTernan (to 15 Jan 2023)	0 - 5	0 - 2.5	17	-	12	0 (9,000 in 21-22)
Jonathan Mills (from 6 Jun 2022)	50 - 55 plus a lump sum of 80 - 85	0 - 2.5 plus a decrease in lump sum of 5 - 7.5	751	701	(18) [Note 4]	-
Paul Monks	5-10	2.5 - 5	84	48	26	-
Ben Rimmington	45 - 50 plus a lump sum of 85 - 90	0 - 2.5 plus a decrease in lump sum of 5 - 7.5	839	761	(13) [Note 4]	-
Jo Shanmugalingam	35 - 40 plus a lump sum of 55 - 60	0 - 2.5 plus a decrease in lump sum of 5 - 7.5	485	443	(14) [Note 4]	-
Joanna Whittington (to 1 Dec 2022)	50 - 55 plus a lump sum of 75 - 80	0 - 2.5 plus a decrease in lump sum of 5 - 7.5	929	893	(13) [Note 4]	-

Director

	Accrued pension at pension age as at 31 March 2023 and related lump sum (£’000)	Real increase in pension and related lump sum at pension age [Note 5] (£’000)	CETV at 31 March 2023 [Note 1] (£’000)	CETV at 31 March 2022 [Note 1] (£’000)	Real increase in CETV (£’000)	Employer contribution to partnership pension account (Nearest £100)
Simon Hulme	5-10	2.5-5	127	78	34	-
Alice Hurrell	50-55	0-2.5	748	676	(9) [Note 4]	-
Donna Leong (from 6 Jun 2022)	30 - 35 plus a lump sum of 40 - 45	0 - 2.5 plus a decrease in lump sum of 2.5 - 5	597	554	(8) [Note 4]	-
Dan Micklethwaite	25-30	0-2.5	347	312	(2) [Note 4]	-
Abigail Morris	0 - 5	0 - 2.5	17	-	11	-
Tim Sparrow (from 8 Sep 2022)	25 - 30	0 - 2.5	376	372	3	-
Tom Taylor (to 12 Feb 2023)	55 - 60 plus a lump sum of 100 - 105	0 - 2.5 plus a decrease in lump sum of 5 - 7.5	988	915	(23) [Note 4]	-

Notes:

1. Where senior officials joined or left during the year, their CETV opening or closing amounts are as at their joining or leaving dates. See Notes to the Remuneration report for explanation of CETV .
2. Not a member of Civil Service pension arrangements during the year.
3. On loan and paid by Cabinet Office.
4. Taking account of inflation, the CETV funded by the employer has decreased in real terms.
5. In some cases, the increase in pension and lump sum can be negative which means a real decrease has occurred. This is because the increase in pension (due to extra service or pay increases) may not be sufficient to offset the increase in inflation, resulting in a real terms reduction.

Non-executive board members – fee entitlements (audited information)

The table below shows fee entitlements for non-executive directors who were members of the departmental board.

	2022‑23 Fee entitlement (£’000)	2022‑23 Full year equivalent if different (£’000)	2021‑22 Fee entitlement (£’000)	2021‑22 Full year equivalent if different (£’000)
Ann Cairns (to 28 Feb 2023)	15-20	20-25	20-25	-
Nigel Boardman (to 23 Jun 2022)	5-10	20-25	5-10	20-25
Vikas Shah [Note 1]	20-25	-	10-15	15-20
Stephen Hill [Note 2]	10-15	15-20	10-15	15-20
Peter Mather [Note 3]	20-25	-	0-5	20-25

Notes:

1. ARAC Chair for Department for Energy Security and Net Zero (DESNZ) from 28 March 2023, from BEIS following the Machinery of Government announcement. ARAC Chair role from 24 June 2022.
2. Transferred to Department of Business and Trade (DBT), as lead non-executive board member in February 2023, from BEIS following the Machinery of Government announcement.
3. Interim Lead, DESNZ from 28 March 2023, from BEIS following the Machinery of Government announcement.

Fair pay disclosure (audited information)

The table below shows the relationship during the year ending 31 March 2023 between the remuneration of the highest-paid director and the median remuneration of the workforce across the core department and 3 agencies, Companies House, Insolvency Service and UK Space Agency. Remuneration figures include salary, non-consolidated performance-related pay and benefits-in-kind. They do not include severance payments, employer pension contributions and the cash equivalent transfer value of pensions.

Reporting bodies are required to disclose the relationship between the remuneration of the highest-paid director in their organisation and the remuneration of the organisation’s workforce.

The banded remuneration of the highest-paid director in BEIS in 2022-23 was £185-190k (2021-22: £200k-£205k). This was 4.41 times (2021-22: 4.98) the median remuneration of the workforce, which was £42,531 (2021-22: £40,650).

In 2022-23, 97 (2021-22: 45) employees received remuneration in excess of the highest-paid director. Remuneration ranged from £16,090 to £430,100 (2021-22 £20,025-£408,595).

The median pay ratio for the relevant financial year is consistent with the pay, reward and progression policies for the entity’s employees taken as a whole. The minor increase in median remuneration of the workforce is due to a pay increase in year for employees in the lowest pay scale.

	2022‑23	2022‑23
Remuneration band of highest paid director	£185,000-£190,000	£200,000-£205,000
Median remuneration of workforce	£42,531	£40,650
Ratio of highest paid director to median	4.41	4.98
Remuneration range of workforce including directors	£16,090 - £430,100	£20,025 - £408,595
Number of people remunerated in excess of highest paid director	97	45

Notes:

• The number of people remunerated in excess of the highest paid director has increased in 2022-23 as a result of an increase in agency staff in implementation work and IT projects.

The table below shows the percentage change from previous year in total salary and allowances and performance pay and bonuses for the highest paid director and for staff average.

	Highest paid director	Staff average
Salary and allowances	3%	2%
Performance pay & bonuses	(85.7%) [Note 1]	2%

Notes:

1. Highest paid director did not receive a bonus in 2022-23.

The below table shows the ratio between the highest paid directors’ total remuneration and the lower, median, and upper quartile for staff total pay and benefits for 2022-23. The slight decrease in ratio results from the remuneration band of the highest paid director decreasing in year.

	2022‑23 Lower quartile	2022‑23 Median	2022‑23 Upper quartile	2021‑22 Lower quartile	2021‑22 Median	2021‑22 Upper quartile
Total pay & benefits	32,920	42,531	57,005	31,392	40,650	54,675
Ratio	5.70:1	4.41:1	3.29:1	6.45:1	4.98:1	3.70:1
Salary	31,457	41,363	55,120	31,000	40,050	53,600
Ratio	5.96:1	4.53:1	3.40:1	6.53:1	5.06:1	3.78:1

Notes to the remuneration report

The information in the remuneration report relates solely to the core department except for the fair pay disclosure, which relates to the core department and 3 of its agencies. Similar information relating to chief executives and most senior managers of the agencies and other bodies of the departmental family is given in the individual annual reports and accounts of the relevant bodies.

Single total figure of remuneration

Salary

‘Salary’ includes gross salary; overtime; reserved rights to London weighting or London allowances; recruitment and retention allowances; private office allowances and any other allowance to the extent that it is subject to UK taxation. This report is based on accrued payments made by the department and thus recorded in these accounts.

In respect of ministers in the House of Commons, departments bear only the cost of the additional Ministerial remuneration; the salary for their services as an MP (£81,932 from 1 April 2022) and various allowances to which they are entitled are borne centrally.

However, the arrangement for ministers in the House of Lords is different in that they do not receive a salary but rather an additional remuneration, which cannot be quantified separately from their ministerial salaries. This total remuneration, as well as the allowances to which they are entitled, is paid by the department and is therefore shown in full in the figures above.

Bonuses

Bonuses are based on performance levels attained and are made as part of the appraisal process. Bonuses relate to the performance in the year in which they become payable to the individual. The bonuses reported in 2022-23 relate to performance in 2021-22 and the comparative bonuses reported for 2021-22 relate to performance in 2020-21.

Pension benefits

Ministerial pensions

Pension benefits for Ministers are provided by the Parliamentary Contributory Pension Fund (PCPF). The scheme is made under statute and the rules are set out in The Ministers’ etc. Pension Scheme 2015.

Those ministers who are Members of Parliament may also accrue an MP ’s pension under the PCPF (details of which are not included in this report). A new MP ’s pension scheme was introduced from May 2015, although members who were MP s and aged 55 or older on 1 April 2013 have transitional protection to remain in the previous MP s’ final salary pension scheme.

Benefits for ministers are payable from State Pension age under the 2015 scheme. Pensions are re-valued annually in line with Pensions Increase legislation both before and after retirement. The contribution rate from May 2015 is 11.1% and the accrual rate is 1.775% of pensionable earnings.

The figure shown for pension value includes the total pension payable to the member under both the pre- and post-2015 ministerial pension schemes.

Ministerial pensions - the Cash Equivalent Transfer Value (CETV)

This is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the pension benefits they have accrued in their former scheme.

CETV figures are calculated using the guidance on discount rates for calculating unfunded public service pension contribution rates that was extant at 31 March 2023. HM Treasury published updated guidance on 27 April 2023; this guidance will be used in the calculation of 2023-24 CETV figures.

The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total Ministerial service, not just their current appointment as a Minister. CETVs are calculated in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.

Ministerial pensions - the real increase in the value of the CETV

This is the element of the increase in accrued pension funded by the Exchequer. It excludes increases due to inflation and contributions paid by the Minister. It is worked out using common market valuation factors for the start and end of the period.

Civil Service pensions

Pension benefits are provided through the Civil Service pension arrangements. From 1 April 2015 a new pension scheme for civil servants was introduced – the Civil Servants and Others Pension Scheme or alpha, which provides benefits on a career average basis with a normal pension age equal to the member’s State Pension Age (or 65 if higher). From that date all newly appointed civil servants and the majority of those already in service joined alpha. Prior to that date, civil servants participated in the Principal Civil Service Pension Scheme (PCSPS). The PCSPS has 4 sections: 3 providing benefits on a final salary basis (classic, premium or classic plus) with a normal pension age of 60; and one providing benefits on a whole career basis (nuvos) with a normal pension age of 65.

These statutory arrangements are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, classic plus, nuvos and alpha are increased annually in line with Pensions Increase legislation. Existing members of the PCSPS who were within 10 years of their normal pension age on 1 April 2012 remained in the PCSPS after 1 April 2015. Those who were between 10 years and 13 years and 5 months from their normal pension age on 1 April 2012 switch into alpha sometime between 1 June 2015 and 1 February 2022. Because the government plans to remove discrimination identified by the courts in the way that the 2015 pension reforms were introduced for some members, it is expected that, in due course, eligible members with relevant service between 1 April 2015 and 31 March 2022 may be entitled to different pension benefits in relation to that period (and this may affect the Cash Equivalent Transfer Values shown in this report – see below). All members who switch to alpha have their PCSPS benefits ‘banked’, with those with earlier benefits in one of the final salary sections of the PCSPS having those benefits based on their final salary when they leave alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the 2 schemes.) Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a defined contribution (money purchase) pension with an employer contribution (partnership pension account).

Employee contributions are salary-related and range between 4.6% and 8.05% for members of classic, premium, classic plus, nuvos and alpha. Benefits in classic accrue at the rate of 1/80th of final pensionable earnings for each year of service. In addition, a lump sum equivalent to 3 years initial pension is payable on retirement. For premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike classic, there is no automatic lump sum. classic plus is essentially a hybrid with benefits for service before 1 October 2002 calculated broadly as per classic and benefits for service from October 2002 worked out as in premium. In nuvos a member builds up a pension based on his pensionable earnings during their period of scheme membership. At the end of the scheme year (31 March) the member’s earned pension account is credited with 2.3% of their pensionable earnings in that scheme year and the accrued pension is uprated in line with Pensions Increase legislation. Benefits in alpha build up in a similar way to nuvos, except that the accrual rate in 2.32%. In all cases members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004.

The partnership pension account is an occupational defined contribution pension arrangement which is part of the Legal & General Mastertrust. The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member). The employee does not have to contribute, but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally-provided risk benefit cover (death in service and ill health retirement).

The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of classic, premium and classic plus, 65 for members of nuvos, and the higher of 65 or State Pension Age for members of alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the 2 schemes, but note that part of that pension may be payable from different ages.)

Further details about the Civil Service pension arrangements can be found at the Civil Service Pensions website.

Civil service pensions - Cash Equivalent Transfer Values

A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to secure pension benefits in another pension scheme or arrangement when the member leaves a scheme and chooses to transfer the benefits accrued in their former scheme. The pension figures shown relate to the benefits that the individual has accrued as a consequence of their total membership of the pension scheme, not just their service in a senior capacity to which disclosure applies.

The figures include the value of any pension benefit in another scheme or arrangement which the member has transferred to the Civil Service pension arrangements. They also include any additional pension benefit accrued to the member as a result of their buying additional pension benefits at their own cost. CETVs are worked out in accordance with The Occupational Pension Schemes (Transfer Values) (Amendment) Regulations 2008 and do not take account of any actual or potential reduction to benefits resulting from Lifetime Allowance Tax which may be due when pension benefits are taken.

Civil service pensions - Real increase in CETV

This reflects the increase in CETV that is funded by the employer. It does not include the increase in accrued pension due to inflation, contributions paid by the employee (including the value of any benefits transferred from another pension scheme or arrangement) and uses common market valuation factors for the start and end of the period.

Parliamentary accountability report

Statement of Outturn against Parliamentary Supply (audited information)

Overview

In addition to the primary statements prepared under IFRS, the Government Financial Reporting Manual (FREM) requires the Department for Business, Energy and Industrial Strategy to prepare a Statement of Outturn against Parliamentary Supply (SOPS) and supporting notes.

The SOPS and related notes are subject to audit, as detailed in the certificate and report of the comptroller and auditor general to the House of Commons.

The SOPS is a key accountability statement that shows, in detail, how an entity has spent against their supply estimate. Supply is the monetary provision (for resource and capital purposes) and cash (drawn primarily from the Consolidated Fund), that Parliament gives statutory authority for entities to utilise. The estimate details supply and is voted on by Parliament at the start of the financial year.

Should an entity exceed the limits set by their supply estimate, called control limits, their accounts will receive a qualified opinion.

The format of the SOPS mirrors the supply estimates, published on GOV.UK, to enable comparability between what Parliament approves and the final outturn.

The SOPS contain a summary table, detailing performance against the control limits that Parliament have voted on, cash spent (budgets are compiled on an accruals basis and so outturn will not exactly tie to cash spent) and administration.

Non-voted Budgets generally comprise CFERs (Consolidated Fund Extra Receipts) that represent operating income or expenditure financed directly from the Consolidated Fund as a standing service or from the National Insurance Fund. Non-voted expenditure does not require Parliamentary authority, but is included within budgets set by HMT for completeness.

Estimates and outturn spend are disclosed gross (gross expenditure and income) for activities of the core department and net for the activities of the departmental group’s arm’s length bodies.

The supporting notes on pages 130 to 143 detail the following: outturn by estimate line, providing a more detailed breakdown (note 1); a reconciliation of Outturn to Net operating expenditure in the SOCNE, to tie the SOPS to the financial statements (note 2); a reconciliation of Outturn to Net cash requirement (note 3); and, an analysis of income payable to the Consolidated Fund (note 4).

The SOPS and estimates are compiled against the budgeting framework, which is similar to, but different from, IFRS . An understanding of the budgeting framework and an explanation of key terms is provided on page 46, in the financial review section of the performance report.

Further information on the public spending framework and the reasons why budgeting rules are different to IFRS can also be found in chapter 1 of the Consolidated Budgeting Guidance, available on GOV.UK.

The SOPS provides a detailed view of financial performance, in a form that is voted on and recognised by Parliament. The financial review, in the performance report, provides a summarised discussion of outturn against estimate and functions as an introduction to the SOPS disclosures.

Summary table 2022-23

Figures in the columns headed ‘Voted’ cover the voted control limits voted by Parliament. Refer to the Supply Estimates guidance manual, available on GOV.UK, for detail on the control limits voted by Parliament. Significant variances between Outturn and the Estimate are explained in the financial review on pages 47 to 48.

	Note	Outturn: Voted (£’000)	Outturn: Non-voted (£’000)	Outturn: Total (£’000)	Estimate: Voted (£’000)	Estimate: Non-voted (£’000)	Estimate: Total (£’000)	Outturn vs Estimate: saving/ (excess) Voted (£’000)	Outturn vs Estimate: saving/ (excess) Total (£’000)	2021‑22 Outturn Total (£’000)
Departmental Expenditure Limit
Resource	1.1	15,599,700	(1,033,909)	14,565,791	18,479,389	(1,033,834)	17,445,555	2,879,689	2,879,764	8,712,053
Capital	1.2	16,908,003	(15,435)	16,892,568	19,873,491	(15,435)	19,858,056	2,965,488	2,965,488	20,992,392
Total DEL		32,507,703	(1,049,344)	31,458,359	38,352,880	(1,049,269)	37,303,611	5,845,177	5,845,252	29,704,445
Annually Managed Expenditure
Resource	1.1	(95,342,859)	263,156	(95,079,703)	(29,793,582)	480,000	(29,313,582)	65,549,277	65,766,121	115,150,355
Capital	1.2	1,270,543	(142,400)	1,128,143	2,984,212	(142,400)	2,841,812	1,713,669	1,713,669	(3,789,642)
Total AME		(94,072,316)	120,756	(93,951,560)	(26,809,370)	337,600	(26,471,770)	67,262,946	67,479,790	111,360,713
Total Budget
Resource	1.1	(79,743,159)	(770,753)	(80,513,912)	(11,314,193)	(553,834)	(11,868,027)	68,428,966	68,645,885	123,862,408
Capital	1.2	18,178,546	(157,835)	18,020,711	22,857,703	(157,835)	22,699,868	4,679,157	4,679,157	17,202,750
Total Budget Expenditure		(61,564,613)	(928,588)	(62,493,201)	11,543,510	(711,669)	10,831,841	73,108,123	73,325,042	141,065,158
Total Budget and non-budget		(61,564,613)	(928,588)	(62,493,201)	11,543,510	(711,669)	10,831,841	73,108,123	73,325,042	141,065,158

Net cash requirement 2022–23

	SOPS note	2022‑23 Outturn (£’000)	2022‑23 Estimate (£’000)	2022‑23 Outturn vs Estimate: saving/ (excess) (£’000)	2021‑22 Outturn total (£’000)
Net cash requirements	3	64,670,205	82,753,446	18,083,241	29,470,720

Administration costs 2022–23

	SOPS note	2022‑23 Outturn (£’000)	2022‑23 Estimate (£’000)	2022‑23 Outturn vs Estimate: saving/ (excess) (£’000)	2021‑22 Outturn total (£’000)
Administration costs	1.1	610,623	644,183	33,560	534,916

Although not a separate voted limit, any breach of the administration budget, will also result in an excess vote.

Notes to the SOPS, 2022-23 (audited information)

SOPS 1. Outturn detail, by estimate line

SOPS 1.1 Analysis of resource outturn by estimate line

Significant variances between outturn and estimate are explained in the financial review on pages 47 to 48.

	2022‑23 Resource outturn: Administration, Gross (£’000)	2022‑23 Resource outturn: Administration, Income (£’000)	2022‑23 Resource outturn: Administration, Net (£’000)	2022‑23 Resource outturn: Programme, Gross (£’000)	2022‑23 Resource outturn: Programme, Income (£’000)	2022‑23 Resource outturn: Programme, Net (£’000)	2022‑23 Resource outturn: Total (£’000)	2022‑23 Estimate: Total (£’000)	2022‑23 Estimate: Virements (£’000)	2022‑23 Estimate: Total inc. virements (£’000)	2022‑23 Outturn vs Estimate: saving/ (excess) (£’000)	2021‑22 Outturn: Total (£’000)
Spending in DEL: Voted expenditure
A: Deliver an ambitious industrial strategy	-	-	-	317,358	(9,453)	307,905	307,905	303,592	4,313	307,905	-	4,140,456
B: Maximise investment opportunities and bolster UK interests	-	-	-	44,515	(5,484)	39,031	39,031	32,897	6,134	39,031	-	131,652
C: Promote competitive markets and responsible business practices	4,259	(39)	4,220	382,837	(157,523)	225,314	229,534	233,376	-	233,376	3,842	208,835
D: Delivering affordable energy for households and businesses	-	-	-	12,623,865	(536)	12,623,329	12,623,329	13,011,674	-	13,011,674	388,345	90,117
E: Ensuring that our energy system is reliable and secure	-	-	-	(351,407)	(9,029)	(360,436)	(360,436)	1,736,513	-	1,736,513	2,096,949	903,253
F: Taking action on climate change and decarbonisation	-	-	-	61,501	(309)	61,192	61,192	54,132	7,060	61,192	-	83,176
G: Managing our energy legacy safely and responsibly	-	-	-	196,899	-	196,899	196,899	205,644	(1,311)	204,333	7,434	195,797
H: Science and Research	1	-	1	9,137	(237)	8,900	8,901	12,680	-	12,680	3,779	43,497
I: Capability	560,696	(21,643)	539,053	15,160	(504)	14,656	553,709	661,988	(72,581)	589,407	35,698	486,262
J: Government as Shareholder	-	-	-	19,702	(33,538)	(13,836)	(13,836)	223,025	(42,831)	180,194	194,030	1,314,153
K: Promote competitive markets and responsible business practices (ALB) net	9,467	-	9,467	53,900	-	53,900	63,367	70,577	-	70,577	7,210	59,308
L: Ensuring that our energy system is reliable and secure (ALB) net	-	-	-	(1,621)	-	(1,621)	(1,621)	1	-	1	1,622	(3,039)
M: Taking action on climate change and decarbonisation (ALB) net	6,047	-	6,047	16,621	-	16,621	22,668	18,059	4,609	22,668	-	15,733
N: Managing our energy legacy safely and responsibly (ALB) net	2,816	-	2,816	36,377	-	36,377	39,193	37,882	1,311	39,193	-	39,668
O: Science and Research (ALB) net	4,011	-	4,011	232,181	-	232,181	236,192	272,227	-	272,227	36,035	238,498
P: Capability (ALB) net	14,576	-	14,576	-	-	-	14,576	1,500	13,076	14,576	-	12,379
Q: Government as Shareholder (ALB) net	109	-	109	39,868	-	39,868	39,977	(2,854)	42,831	39,977	-	20,266
R: NDA and SLC expenditure (ALB) net	30,323	-	30,323	1,508,797	-	1,508,797	1,539,120	1,643,865	-	1,643,865	104,745	1,427,904
Total voted DEL	632,305	(21,682)	610,623	15,205,690	(216,613)	14,989,077	15,599,700	18,516,778	(37,389)	18,479,389	2,879,689	9,407,915
Spending in DEL: Non‑voted expenditure
S: Deliver an ambitious industrial strategy (CFER)	-	-	-	-	(773)	(773)	(773)	(698)	-	(698)	75	(1,454)
T: Science and Research (CFER)	-	-	-	-	(106)	(106)	(106)	(1,600)	1,494	(106)	-	(555)
U: Nuclear Decommissioning Authority Income (CFER)	-	-	-	-	(1,033,030)	(1,033,030)	(1,033,030)	(1,068,925)	35,895	(1,033,030)	-	(693,853)
Total non-voted DEL	-	-	-	-	(1,033,909)	(1,033,909)	(1,033,909)	(1,071,223)	37,389	(1,033,834)	75	(695,862)
Spending in AME: Voted expenditure
V: Deliver an ambitious industrial strategy	-	-	-	(87,398)	(7,072)	(94,470)	(94,470)	(46,025)	(15,057)	(61,082)	33,388	(62,525)
W: Maximise investment opportunities and bolster UK interests	-	-	-	(636)	-	(636)	(636)	8,200	-	8,200	8,836	(703)
X: Promote competitive markets and responsible business practices	-	-	-	105,590	(599)	104,991	104,991	107,919	(394)	107,525	2,534	72,940
Y: Delivering affordable energy for households and businesses	-	-	-	31,139,981	(1,341)	31,138,640	31,138,640	56,300,000	(1,342,083)	54,957,917	23,819,277	-
Z: Ensuring that our energy system is reliable and secure	-	-	-	(345,889)	(1,028)	(346,917)	(346,917)	(1,689,000)	1,342,083	(346,917)	-	338,849
AA: Taking action on climate change and decarbonisation	-	-	-	(1,095)	(1,748)	(2,843)	(2,843)	(1)	-	(1)	2,842	241
AB: Managing our energy legacy safely and responsibly	-	-	-	(11,025)	(18,677)	(29,702)	(29,702)	(51,600)	21,898	(29,702)	-	(78,851)
AC: Science and Research	-	-	-	20,217	(510)	19,707	19,707	16,539,857	-	16,539,857	16,520,150	109,627
AD: Capability	-	-	-	(16,731)	-	(16,731)	(16,731)	(1,247)	-	(1,247)	15,484	5,305
AE: Government as Shareholder	-	-	-	232,692	(302,296)	(69,604)	(69,604)	43,113	-	43,113	112,717	178,940
AF: Renewable Heat Incentive	-	-	-	1,001,880	-	1,001,880	1,001,880	1,063,461	-	1,063,461	61,581	919,555
AG: Deliver an ambitious industrial strategy (ALB) net	-	-	-	43,059	-	43,059	43,059	28,002	15,057	43,059	-	473
AH: Promote competitive markets and responsible business practices (ALB) net	-	-	-	(47)	-	(47)	(47)	(441)	394	(47)	-	375
AI: Taking action on climate change and decarbonisation (ALB) net	-	-	-	(13,507,265)	-	(13,507,265)	(13,507,265)	6,200,000	-	6,200,000	19,707,265	10,015,257
AJ: Managing our energy legacy safely and responsibly (ALB) net	-	-	-	(3,385,547)	-	(3,385,547)	(3,385,547)	(3,238,206)	(21,898)	(3,260,104)	125,443	3,112,786
AK: Science and Research (ALB) net	-	-	-	77,990	-	77,990	77,990	166,347	-	166,347	88,357	192,049
AL: Capability (ALB) net	-	-	-	-	-	-	-	2	-	2	2	10
AM: Government as Shareholder (ALB) net	-	-	-	90,013	-	90,013	90,013	169,750	-	169,750	79,737	(520,071)
AN: Nuclear Decommissioning Authority (ALB) net	-	-	-	(110,365,377)	-	(110,365,377)	(110,365,377)	(105,393,713)	-	(105,393,713)	4,971,664	100,605,107
Total voted AME	-	-	-	(95,009,588)	(333,271)	(95,342,859)	(95,342,859)	(29,793,582)	-	(29,793,582)	65,549,277	114,889,364
Spending in AME: Non‑voted expenditure
AP: Promote competitive markets and responsible business practices	-	-	-	272,753	(9,597)	263,156	263,156	480,000	-	480,000	216,844	260,991
Total non-voted AME	-	-	-	272,753	(9,597)	263,156	263,156	480,000	-	480,000	216,844	260,991
Total spending in AME	-	-	-	(94,736,835)	(342,868)	(95,079,703)	(95,079,703)	(29,313,582)	-	(29,313,582)	65,766,121	115,150,355
Total resource	632,305	(21,682)	610,623	(79,531,145)	(1,593,390)	(81,124,535)	(80,513,912)	(11,868,027)	-	(11,868,027)	68,645,885	123,862,408
Non‑budget: voted
Total Resource and non-budget spending	632,305	(21,682)	610,623	(79,531,145)	(1,593,390)	(81,124,535)	(80,513,912)	(11,868,027)	-	(11,868,027)	68,645,885	123,862,408

The total Estimate columns include virements. Virements are the reallocation of provision in the Estimates that do not require parliamentary authority (because Parliament does not vote to that level of detail and delegates to HM Treasury). Further information on virements is provided in the Supply Estimates Manual, available on GOV.UK.

The outturn vs estimate column is based on the total including virements. The estimate total before virements have been made is included so that users can tie the estimate back to the Estimates laid before Parliament.

SOPS 1.2. Analysis of capital Outturn by Estimate line

	2022‑23 Capital outturn: Gross (£’000)	2022‑23 Capital outturn: Income (£’000)	2022‑23 Capital outturn: Net total (£’000)	2022‑23 Estimate: Total (£’000)	2022‑23 Estimate: Virements (£’000)	2022‑23 Estimate: Total inc. virements (£’000)	2022‑23 Outturn vs Estimate: saving/ (excess) (£’000)	2021‑22 Outturn: Total (£’000)
Spending in DEL: Voted expenditure
A: Deliver an ambitious industrial strategy	333,309	(283,044)	50,265	131,306	(24,070)	107,236	56,971	240,578
B: Maximise investment opportunities and bolster UK interests	191,394	18,743	210,137	208,835	1,302	210,137	-	299,682
C: Promote competitive markets and responsible business practices	(615)	(4,337)	(4,952)	33,250	-	33,250	38,202	19,956
D: Delivering affordable energy for households and businesses	434,378	(68,474)	365,904	498,178	-	498,178	132,274	1,256,203
E: Ensuring that our energy system is reliable and secure	2,076,559	-	2,076,559	4,871,622	(894,186)	3,977,436	1,900,877	1,005,678
F: Taking action on climate change and decarbonisation	221,570	-	221,570	318,864	-	318,864	97,294	281,860
G: Managing our energy legacy safely and responsibly	11,836	-	11,836	14,189	-	14,189	2,353	5,620,909
H: Science and Research	1,028,405	(48,695)	979,710	1,751,960	(772,250)	979,710	-	727,173
I: Capability	24,760	(1,393)	23,367	(703)	24,070	23,376	-	28,012
J: Government as Shareholder	188,960	(46,950)	142,010	62,718	79,292	142,010	-	322,341
K: Promote competitive markets and responsible business practices (ALB) net	1,830	-	1,830	3,440	-	3,440	1,610	2,010
L: Ensuring that our energy system is reliable and secure (ALB) net	840,898	-	840,898	-	840,898	840,898	-	-
M: Taking action on climate change and decarbonisation (ALB) net	1,629	-	1,629	5,794	-	5,794	4,165	2,500
N: Managing our energy legacy safely and responsibly (ALB) net	24,290	-	24,290	32,122	-	32,122	7,832	25,769
O: Science and Research (ALB) net	9,567,396	-	9,567,396	8,746,473	820,923	9,567,396	-	8,691,692
P: Capability (ALB) net	3,313	-	3,313	-	3,313	3,313	-	3,558
Q: Government as Shareholder (ALB) net	199,646	-	199,646	994,450	(79,292)	915,158	715,512	456,799
R: NDA and SLC expenditure (ALB) net	2,192,595	-	2,192,595	2,200,993	-	2,200,993	8,398	2,023,096
Total voted DEL	17,342,153	(434,150)	16,908,003	19,873,491	-	19,873,491	2,965,488	21,007,816
Spending in DEL: Non‑voted expenditure
S: Deliver an ambitious industrial strategy (CFER)	-	(13,333)	(13,333)	(13,333)	-	(13,333)	-	(13,333)
T: Science and Research (CFER)	-	(2,102)	(2,102)	(2,102)	-	(2,102)	-	(2,091)
Total non-voted DEL	-	(15,435)	(15,435)	(15,435)	-	(15,435)	-	(15,424)
Total spending in DEL	17,342,153	(449,585)	16,892,568	19,858,056	-	19,858,056	2,965,488	20,992,392
Spending in AME: Voted expenditure
X: Promote competitive markets and responsible business practices	-	-	-	-	-	-	-	151
AB: Managing our energy legacy safely and responsibly	18,677	-	18,677	18,677	-	18,677	-	23,091
AC: Science and Research	1,266	-	1,266	1,172,287	(4,402)	1,167,885	1,166,619	1,271
AD: Capability	-	-	-	-	-	-	-	144
AE: Government as Shareholder	4,628,715	(3,307,000)	1,321,715	1,792,878	-	1,792,878	471,163	(3,596,201)
AG: Deliver an ambitious industrial strategy (ALB) net	4,140	-	4,140	-	4,140	4,140	-	(13,310)
AI: Taking action on climate change and decarbonisation (ALB) net	74	-	74	-	74	74	-	54
AJ: Managing our energy legacy safely and responsibly (ALB) net	558	-	558	370	188	558	-	-
AK: Science and Research (ALB) net	(75,887)	-	(75,887)	-	-	-	75,887	(57,467)
AM: Government as Shareholder (ALB) net	-	-	-	-	-	-	-	(4,975)
Total voted AME	4,577,543	(3,307,000)	1,270,543	2,984,212	-	2,984,212	1,713,669	(3,647,242)
Spending in AME: Non‑voted expenditure
AO: Managing our energy legacy safely and responsibly (CFER)	-	(142,400)	(142,400)	(142,400)	-	(142,400)	-	(142,400)
Total non-voted AME	-	(142,400)	(142,400)	(142,400)	-	(142,400)	-	(142,400)
Total spending in AME	4,577,543	(3,449,400)	1,128,143	2,841,812	-	2,841,812	1,713,669	(3,789,642)
Total capital	21,919,696	(3,898,985)	18,020,711	22,699,868	-	22,699,868	4,679,157	17,202,750
Non‑budget
Total capital and non-budget spending	21,919,696	(3,898,985)	18,020,711	22,699,868	-	22,699,868	4,679,157	17,202,750

The total Estimate columns include virements. Virements are the reallocation of provision in the Estimates that do not require parliamentary authority (because Parliament does not vote to that level of detail and delegates to HM Treasury). Further information on virements is provided in the Supply Estimates Manual, available on GOV.UK. The outturn vs estimate column is based on the total including virements. The estimate total before virements have been made is included so that users can tie the estimate back to the Estimates laid before Parliament.

Significant variances between Outturn and Estimate are explained in the financial review on pages 47 to 48.

SOPS 2. Reconciliation of outturn to net operating expenditure

As noted in the overview to the SOPS, outturn and the estimates are compiled against the budgeting framework – which is similar to, but different from, IFRS. Therefore, this reconciliation bridges the resource outturn to net operating expenditure, linking the SOPS to the financial statements.

The prior year comparatives present the Net operating expenditure as reported on 31 March 2022.

	SOPS note	2022‑23 Outturn total (£’000)	2021‑22 Outturn total (£’000)
Total resource Outturn in Statement of Outturn against Parliamentary Supply	SOPS 1.1	(80,513,912)	123,862,408
Add
NDA remedial decommissioning costs which are capital in budgets but taken through the SOCNE		2,187,822	2,010,568
Capital grants		1,967,613	8,040,251
Share of profit/loss of joint ventures and associates		(305,639)	(158,633)
Other non-budget		47,882	71,583
Financial guarantees		1,296,383	(3,480,509)
Research and development costs		9,803,250	9,080,276
Total		14,997,311	15,563,536
Less
Non-budget, non voted items in respect of BIS (Postal Services Act 2011) Company Limited and B Company Limited		(4,975)	-
Expected return on pension scheme assets		(55,574)	(37,878)
NDA income scored in SOPS only		57,613	43,387
Capital income in SOCNE		(11,739)	(50,522)
Research and development income		(384,052)	(495,781)
Other
Impact of intra group transactions		72,471	65,996
Total		(326,256)	(474,798)
Net Operating Expenditure for the period in Consolidated Statement of Comprehensive Net Expenditure	SoCNE	(65,842,857)	138,951,146

Some NDA decommissioning utilisations are capital in nature and therefore not included in resource outturn, this results in them being a reconciling item.

Capital grants are budgeted for as capital departmental expenditure limit (CDEL) but accounted for as expenditure and income in the SOCNE, and therefore function as a reconciling item between Resource and Net Operating expenditure.

Share of profit/loss of joint ventures and associates is accounted for in the SOCNE as a non-budget item and therefore function as a reconciling item.

Other non-budget includes intra group transactions where the cash payment is eliminated and the budget impact is therefore recognised as a reconciling item.

Financial guarantees are budgeted for as CAME. They are recognised as expenditure in the SOCNE and relate to the COVID-19 and recovery business loan schemes.

Research and Development is budgeted for as CDEL but accounted for as income and expenditure in the SOCNE and therefore function as a reconciling item.

SOPS 3. Reconciliation of net resource outturn to net cash requirement

As noted in the overview to the SOPS, outturn and the estimates are compiled against the budgeting framework - not on a cash basis. Therefore, this reconciliation bridges the resource and capital outturn to the net cash requirement.

	SOPS note	Outturn total (£’000)	Estimate (£’000)	Outturn vs Estimate: saving/(excess) (£’000)
Total Resource Outturn	SOPS 1.1	(80,513,912)	(11,868,027)	68,645,885
Total Capital Outturn	SOPS 1.2	18,020,711	22,699,868	4,679,157
Adjustments for ALBs
Remove voted resource and capital		112,333,221	88,043,360	(24,289,861)
Removal of intra-group transactions		334,273	-	(334,273)
Add cash in grant-in-aid		13,292,938	14,267,405	974,467
Add share purchase and loans		429,934	-	(429,934)
Less share capital repayment		(686)	-	686
Adjustments to remove non-cash items
Depreciation		(186,780)	(372,936)	(186,156)
New provisions and adjustments to previous provisions		(3,346,294)	(37,179,324)	(33,833,030)
Other non-cash items		1,156,620	38,182	(1,118,438)
Financial guarantees and loan commitment liabilities		4,249,068	-	(4,249,068)
Adjustments to reflect movements in working balances
Increase/(decrease) in receivables		603,909	-	(603,909)
(Increase)/decrease in payables		(2,832,653)	6,143,268	8,975,921
Use of provisions		201,268	232,592	31,324
Total		126,234,818	71,172,547	(55,062,270)
Removal of non-voted budget items
Other non-voted budget items		928,588	749,058	(179,530)
Total		928,588	749,058	(179,530)
Net cash requirement		64,670,205	82,753,446	18,083,241

SOPS 4. Amounts of income to the Consolidated Fund

SOPS 4.1 – Analysis of income payable to the Consolidated Fund

In addition to the income retained by the department, the following income is payable to the consolidated fund (cash receipts being shown in brackets).

The type of income allowed to be retained by the Department is set out in the ambit of the Supply Estimate. Income of a type not included in the Estimate, or in excess of amounts agreed with HM Treasury, is required to be surrendered to the Consolidated Fund. This includes the commercial income of the Nuclear Decommissioning Authority and receipts arising from Coal Pension surpluses, which forms the bulk of the amounts shown below, together with other miscellaneous receipts.

	2022‑23 Outturn total: accruals (£’000)	2022‑23 Outturn total: cash basis (£’000)	2021‑22 Outturn total: accruals (£’000)	2021‑22 Outturn total: cash basis (£’000)
Operating income of the NDA within the Ambit	572,228	(562,000)	480,925	(493,000)
Income outside the ambit of the Estimate	42,560	(42,560)	205,129	(205,129)
[Excess] cash surrenderable to the Consolidated Fund	142,400	(142,400)	142,400	(142,400)
Total amount payable to the Consolidated Fund	757,188	(746,960)	828,454	(840,529)

SOPS 4.2: Consolidated Fund income

BEIS also collects income as an agent for the consolidated fund. This income is disclosed separately in the trust statement and is not included in SOPS 4.1 – income payable to the consolidated fund.

Details are also provided in the individual accounts of the Insolvency Service for items which are not included in note 4.1.

Other parliamentary disclosures (audited information)

Losses statement

	2022‑23 Core department and agencies	2022‑23 Departmental group	2021‑22 Core department and agencies	2021‑22 Departmental group
Total number of losses	24,729	303,378	5,765	53,512
Redundancy Payments Service (RPS) receivable impairment - £m	263	263	262	262
COVID-19 business support grant schemes - £m	-	-	21	21
COVID-19 loan guarantee schemes - £m	638	638	128	128
Other losses - £m	7	37	10	35
Total value of losses - £m	909	938	421	446

Losses over £300,000 - core department

COVID-19 business support grants:
In 2021-22, the department estimated, based on information available at the time, that loss in relation to irregularity on the COVID-19 business support grants paid in 2021-22, fell within the range of £63 million and £3 million, the midpoint of the estimate being £30 million.

This estimate has been updated in 2022-23 and the prior year figures have been updated in the table above. The midpoint of the estimate is £20.9 million with a range of £41.9 million and £1.7 million. The refined estimate is slightly lower than the estimate included in last year’s annual report and accounts. Further detail on this can be found in the regularity statement on page 157.

COVID-19 loan guarantees:
Lenders have notified the core department of suspected borrower fraud in relation to 16,846 guarantee facilities with the claims value totalling £638 million which were paid out by the core department under the Bounce Back Loan Scheme, Coronavirus Business Interruption Loan Scheme and Recovery Loan Scheme (note 21) during 2022-23 (31 March 2022: £128 million). The department’s work on recovering funds due to fraud is provided in the fraud and error section in the performance report.

Other losses:
Other losses include £4 million in relation to 2 suspected fraudulent payments within the Future Fund (F F ) Scheme (31 March 2022: £9 million), and £1.6 million of losses for the core department relating to an early termination of a Help to Grow service delivery contract.

Also included in the table above is £527,400 of losses for the core department relating to 879 vouchers incorrectly claimed within the Energy Bills Support Scheme and Alternative Fuel Payment Northern Ireland. To ensure that eligible customers did not suffer any longstanding detriment and were therefore provided the correct level of support in a timely manner, the department re-issued payments to eligible customers (subject to provision of requisite information to substantiate erroneous payment) directly to their bank accounts. This is on the understanding that steps will be taken to recover any ineligible payments identified through investigations being carried out by relevant law enforcement bodies.

Losses over £300,000 - agencies

Claims abandoned:
Redundancy Payments Service (RPS) receivable impairment: most of the redundancy payments made from the National Insurance Fund (NIF) are in respect of employees of insolvent companies. Repayment of debt is recovered from the sale of the assets of the insolvent company. A small proportion of the debt (13%) is preferential, and as such has a higher recovery rate. HMRC record the impairment of the R P S receivable in NIF accounts. The RPS receivable impairment for 31 March 2023 is £263 million (31 March 2022: £262 million).

Special payments

Special payments include extra-contractual, ex gratia, compensation, special severance payments, extra-statutory and extra-regulatory.

	2022‑23 Core department and agencies	2022‑23 Departmental group	2021‑22 Core department and agencies	2021‑22 Departmental group
Total number of special payments	65	72	97	104
Total value of special payments - £m	-	1	21	21

Special severance payments

There were 5 special severance payments made in the year. The amounts paid are not disclosed as doing so would conflict with BEIS’ legal obligation under the data protection act 2018.

Special payments over £300,000

The total special payments incurred by the department were £1 million. There were no individual special payments above £300,000.

Gifts

Managing Public Money requires annual reports to report on gifts made by departments if their total value exceeds £300,000. Gifts with a value of more than £300,000 should be noted individually. During 2022-23, the Core department did not give any reportable gifts above £300,000.

Fees and charges

Core department

The core department has fees generated from the Coronavirus Business Interruption Loan Scheme, Coronavirus Large Business Interruption Loan Scheme, and the Recovery Loan Scheme, further details can be found in note 6.1.

Details of charging polices relating to partner organisations may be found in their respective published accounts.

Agencies

Insolvency Service:
The Insolvency Service sets its fees to recover costs and has a range of fees covering 4 areas:

• case administration: the average costs of administering bankruptcy cases and compulsory company liquidation cases
• debt relief orders: the cost of considering an application for a debt relief order by the Official Receiver
• estate accounting: the cost of financial transactions on insolvency cases using the Insolvency Services account
• insolvency practitioner regulations: the cost of authorising and monitoring insolvency practitioners and registering individual voluntary arrangements

Companies House:
Companies House sets its fees to recover costs, and has a range of fees covering 2 main areas:

• registration activities – includes incorporation, annual registration, change of name, mortgage registration, dissolution, liquidation and recharges of costs incurred in the administration of late filling penalties
• dissemination activities – includes searches delivered on paper, electronically and to bulk customers insolvency practitioner regulations

Remote contingent liabilities

In addition to contingent liabilities reported in the financial statements, under IAS 37, the department also reports remote contingent liabilities. These are liabilities that have a small, remote likelihood of resulting in a transfer of economic benefit by the department. The department has given the following guarantees, indemnities, or letters of comfort.

Quantifiable remote contingent liabilities

	1 April 2022 (£m)	Increase / (decrease) in year (£m)	Crystallised in year (£m)	Expired in year (£m)	31 March 2023 (£m)	Amount reported to Parliament by Departmental Minute (£m)
The core department has indemnified Cornwall Council for any liability relating to the European Regional Development Fund (ERDF) that might arise from the transfer of Wave Hub due to (a) any breach of the ERDF Funding Agreements which occurred on or before the transfer date of 31 March 2017 and (b) any action or omission by the Core Department or Wave Hub in relation to the ERDF Funding Agreements prior to the transfer which leads to finding of an Irregularity by any competent authority.	18	-	-	-	18	18
The core department has indemnified the Coal Authority against potential claims arising from remunerated advisory work undertaken for other public sector bodies where settlement exceeds the Authority’s professional indemnity insurance.	3	-	-	-	3	-
Departmental group: As part of a sale agreement relating to a previous Biotechnology and Biological Sciences Research Council (BBSRC) site, BBSRC (now part of UKRI) agreed to indemnify the purchaser against contamination resulting from dangerous substances. The indemnity was over a 10-year period commencing in 2013-14 and was capped at £3 million.	3	-	-	-	3	-
Total	24	-	-	-	24	18

Unquantifiable remote contingent liabilities - core department

Statutory indemnities:

• Indemnities have been given to the UK Atomic Energy Authority to cover certain indemnities provided by the authority to carriers and British Nuclear Fuels Limited against certain claims for damage caused by nuclear matter in the course of carriage.
• Indemnities have been given to bankers of the Insolvency Service against certain liabilities arising in respect of non-transferable ‘account payee’ cheques due to insolvent estates and paid into the Insolvency Service’s account.
• Indemnity has been given to National Grid’s liabilities with regards to the interconnector linking the UK and France.
• A statutory liability will arise under the Nuclear Installations Act 1965 (as amended by the Nuclear Installations (Liability for Damage) Order 2016) for third-party claims in excess of the operator’s liability in the event of a nuclear accident in the UK.
• Indemnities have been provided to certain nuclear site companies and the Nuclear Decommissioning Authority in respect of personal injury claims in the event of a nuclear incident.
• Indemnities have been provided to the Energy Price Guarantee scheme administrators in relation to legal fees in case of a legal action against the administrators.
• The department has indemnified the Post Office Limited (and its agents, employees and subcontractors) for any and all loss, damage, costs or expenses of Post Office Limited arising from particular actions of domestic electricity suppliers supplies and customers in relation to the Energy Bills Support Scheme NI (EBSS NI) and the Alternative Fuel Payment NI (AFP NI) schemes.
• A contingent liability exists in relation to the possibility of claims for any exposure to ionising radiation arising from the fusion activities of the UK Atomic Energy Authority.

Intellectual property:

• A liability to the European Patent Office could arise under Article 40 of the European Patent Convention of 1973 as the UK is one of the contracting states.
• A liability to the World Intellectual Property Organisation could arise under Article 57 of the Patent Cooperation Treaty as the UK is one of the contracting states.

Legal costs:

• A contingent liability exists in relation to various ongoing legal cases. The cost is dependent on the outcome of cases which currently cannot be reliably estimated.
• Under an agreement with the Financial Reporting Council, if the amount held in the Council’s legal costs fund falls below £1 million in any year, an additional grant will be made to cover legal costs subsequently incurred in that year.

Indemnities against personal liability:

• Indemnities have been given to the directors appointed by the core department to wholly owned subsidiaries. These indemnities are against personal liability following any legal action against the companies.
• Indemnities have been provided to directors appointed to the Low Carbon Contracts Company Limited and Electricity Settlements Company Limited against personal liability following any legal action against the companies, to be triggered only after all other means have been exhausted i.e. company and directors’ insurance and recovery of costs through their levies.
• Indemnities have been provided to the Low Carbon Contracts Company Limited and Electricity Settlements Company Limited in respect of their officers, to be triggered only after all other means have been exhausted i.e. company and directors’ insurance and recovery of costs through their levies.
• Indemnities have been provided to trustees of the Nuclear Liabilities Fund appointed by the Secretary of State against personal liability in the event of legal action against the Fund.
• Indemnities have been provided to trustees of the Nuclear Liabilities Fund appointed by British Energy (now EDF Energy) against personal liability in the event of legal action against the Fund, to be triggered only in the event of failed recourse to indemnities from EDF Energy.
• Indemnities have been provided to certain insolvency administrators, including the Official Receiver, relating to actions undertaken in respect of administration of specified companies.
• Indemnities have been provided to the Oil and Gas Authority (OGA) who operate as the North Sea Transition Authority (NSTA), in respect of certain liabilities that could arise from the actions or omissions of its directors and otherwise arising from a director holding or having held office in the company.
• Indemnities have been provided to the M C S Service Company Limited and trustees of the MCS Charitable Foundation for any liability that might arise as a result of actions taken and decisions made for which the Core Department was ultimately responsible prior to transfer to the Company and Charitable Foundation of responsibility for the Microgeneration Certification Scheme (MCS) in April 2018.
• An indemnity has been provided to the Chair of the Post Office Horizon I T Inquiry in respect of any liabilities he may incur as a result of holding, or having held, this position.
• An indemnity has been provided to Elexon Limited against third party claims relating to the design and/or implementation of the Contracts for Difference and Capacity Markets settlement systems which are not covered by insurance and/or guarantees by their sub contractors.

Losses or damages under agreements:

• An indemnity has been provided for any losses or damages caused to other parties to the Energy Research Partnership consortium agreement.

Environmental clean-up:

• A contingent liability exists in relation to the costs of retrieving and disposing of sealed radioactive sources under the Environmental Permitting (England and Wales) Regulations 2016 in the event that a company keeping such sources becomes insolvent.
• A contingent liability arises in relation to the remediation of land contaminated by a nuclear occurrence as the Secretary of State is deemed to be the appropriate person to bear responsibility under section 9 of The Radioactive Contaminated Land (Modification of Enactments) (England) (Amendment) Regulations 2007 S I 2007/3245.
• The Nuclear Liabilities Fund was established in 1996 to meet certain costs of decommissioning 8 nuclear power plants in the UK that have been owned and operated by EDF Energy Nuclear Generation Limited since 2009. A constructive obligation was created in 2002 when the government undertook to underwrite the fund in respect of these liabilities to the extent that the assets of the fund might fall short; any surplus generated by the Fund would be paid over to the government once the liabilities have been met. The total undiscounted estimated liability as at 31 March 2023 of £26.5 billion (31 March 2022: £24.7 billion) has a present value of £19.0 billion (31 March 2022: £51.9 billion) which includes an allowance for future inflation. The value of the fund as at 31 March 2023 is £20.5 billion (31 March 2022: £20.4 billion). It is not possible to quantify the extent to which the government may be obliged to contribute to the fund, nor of any surplus that may arise, given the high level of uncertainty relating to estimation of decommissioning costs and investment returns on fund assets over a future period exceeding 100 years.
• Under the United Nations Convention on the Law of the Sea (UNCLOS) 1982, OSPAR decision 98/3, the Energy Act 2004 and the Petroleum Act 1998, the Department would become responsible for decommissioning most oil, gas and renewable energy installations in the event that operators are unable to fulfil their decommissioning commitments.
• A contingent liability exists in relation to responsibility that the department inherited from British Coal to reimburse certain third parties for costs incurred meeting statutory environmental standards in the restoration of particular coal-related sites.

Others:

• A contingent liability exists in respect of the risks associated with the core department assuming responsibility for uplifts in pension contributions for the UK Atomic Energy Authority’s non-active pension scheme members.
• The Secretary of State Investor Agreement (SOSIA) provides protections in certain scenarios where the Hinkley Point C nuclear plant is shut down for reasons that are political or due to certain changes in insurance arrangements or certain changes in law. Payments under the SOSIA would be expected in the first instance to be made using funds from the Supplier Obligation but in certain circumstances they could also come direct from the Secretary of State, relying on spending powers granted under the relevant Appropriation Act or, if payments were to be made over a period longer than 2 years, seeking a new spending power at the time. The payments could be up to around £22 billion excluding non-decommissioning operational costs that may be incurred after any shutdown. However, the liability to make payments under the SOSIA is almost entirely within the control of HM Government.

Unquantifiable remote contingent liabilities - departmental group

UK Space Agency (UKSA):

• Under international (UN) convention, the UK government is ultimately liable for third party costs from accidental damage arising from UK space activities. To manage the risk to the government, the Outer Space Act 1986 requires licensees to indemnify HMG against any proven third-party costs. In March 2015, the Outer Space Act 1986 was amended to provide for a limit of liability to be applied in licences to what was previously an unlimited liability to indemnify HMG for licensed activities. The Outer Space Act now regulates spaceflight activities carried out overseas by UK entities only.
• With the coming into force of the Space Industry Act on 29 July 2021, this act now regulates licensed spaceflight activities in the UK. The Act requires the licensee to indemnify claims made against the UK government and also claims made by third-parties against the licensee with respect to damage arising in the UK. Limits of operator liability are to be included as licence conditions in licences issued under the Act. Therefore, no operator will be facing unlimited liability for activities carried out in compliance with the act.
• BEIS holds the contingent liability arising from satellite operations and procuring a launch under both the Space Industry Act and the Outer Space act. The Department for Transport will hold the contingent liability for launch activities taking place from the UK.
• For satellite operations, an operator’s limit of liability for licenses issued under either the Outer Space Act and the Space Industry Act is currently set at €60 million for standard missions licensed and can be increased for higher risk missions. For procuring a launch, the limit of liability is currently set at €60m for launches taking place overseas and the limit of liability for the procurement of a UK launch will be set in licences at the same level as the limit of liability applying to the launch vehicle. There is a requirement on licensees to obtain third party liability insurance to the level of the limit of liability set out in the licence for the duration of the licensed activity, with the UK government a named beneficiary.
• These requirements are currently under review as part of a wider review of insurance requirements and liability limits (see the government’s response to the call for evidence issued in October 2021 for further information about recommendations arising from the review.
• The UK government is therefore exposed to a potential liability for third party costs which are not recoverable from the licensee. This liability is unquantifiable at the time of reporting.

UKRI:

• UKRI collaborates with a number of other international partners in the funding, management and operation of technical facilities which are not owned by UKRI. In the event of a decision to withdraw from any of these arrangements, it is likely that UKRI would assist in the search for a replacement partner to ensure that technical commitments were met. The most significant international collaborations are in respect of CERN and European Southern Observatory (ESO). For both of these facilities there is the possibility that UKRI would be obliged to contribute to decommissioning costs arising from a decision taken to discontinue operations. The decisions to decommission are not wholly within UKRI’s control.

NDA:

• The NDA has non-quantifiable contingent liabilities arising from indemnities given as part of the contracts for the management of the nuclear site license companies. These indemnities are in respect of the uninsurable residual risk that courts in a country which is not party to the Paris and Brussels Conventions on third party liability in the field of nuclear energy may accept jurisdiction to determine liability in the event of a nuclear incident. Indemnities are provided to the previous Parent Body Organisations (PBOs) of LLWR, Magnox, Sellafield and Dounreay covering the periods of their ownership.

Other potential or expected liabilities (unaudited)

The department has entered into the following arrangements below. Their details of which are provided in the interests of transparency. They are not contingent liabilities which require disclosure under IAS 37 or Managing Public Money, as the obligating events did not exist at the reporting date.

Hinkley Point C Funded Decommissioning Programme (FDP) and Waste Transfer Contracts (WTCs)

The contract with NNB Generation Company Limited (NNB) to build Hinkley Point C (HPC) nuclear power plant includes a Contract for Difference between NNB and the Low Carbon Contracts Company Ltd, an FDP and associated FDP documents including WTCs between NNB and the Core Department.

The FDP and related documents including WTCs require NNB to make prudent provision for their waste and decommissioning liabilities. To meet their liabilities, the operator must set up a fund with an independent governance framework and will pay into it so that it is on track to fund the liabilities that arise from decommissioning and waste management. The fund will report annually to the Secretary of State and a full review will be conducted every 5 years to ensure that the fund is on track to meet all its liabilities. If it is off track, the operator will be required to take corrective action. These liabilities are strictly the operator’s responsibility and the probability of taxpayers picking up these liabilities is remote.

Alongside the FDP, the government has entered into 2 WTCs. These set out terms on which the government will take title to and liability for the spent fuel and intermediate level waste (ILW) from the site after decommissioning in order to dispose of the waste safely. The WTCs have generally been prepared in line with the government’s published waste transfer pricing methodology.[^1] Although the WTCs provide a default price based on today’s best estimate, they allow the waste transfer price to be set after a specified later date. The final price agreed is subject to a cap, but the likelihood of the future costs exceeding the agreed cap is considered remote.

Capacity agreements

These are statutory arrangements between National Grid, as system operator, and capacity providers. They require the capacity provider to be able to provide a given level of capacity in relevant delivery years when called upon to do so by National Grid. At a capacity auction, applicants who offer the lowest bid can win a capacity agreement. A capacity auction relates to delivery of capacity approximately 4 years ahead (T-4). Most recently, the capacity agreements resulting from the 2020 T-4 capacity auction held in March 2020, are for the delivery year commencing in 2023-24. In addition to T-1, T-3 and T-4, there have been Transitional arrangements auctions (preceding full CM delivery in 2018-19). There are currently 11 live capacity auctions out of a total of 18, which have been awarded from the start of the scheme in 2014 for the delivery year commencing 2016-17 and 6 active auctions in financial year 2022-23.

	Departmental group As at 31 March 2023 Due with 1 year (£m)	Departmental group As at 31 March 2023 Due with 2-5 years (£m)	Departmental group As at 31 March 2023 Due over 5 years (£m)	Total (£m)	Departmental group As at 31 March 2022 Due with 1 year (£m)	Departmental group As at 31 March 2022 Due with 2-5 years (£m)	Departmental group As at 31 March 2022 Due over 5 years (£m)	Total (£m)
Capacity Market – ESC	1,089	7,032	6,621	14,742	745	4,093	5,327	10,165
Income from levy – ESC	(1,089)	(7,032)	(6,621)	(14,742)	(745)	(4,093)	(5,327)	(10,165)
Total	-	-	-	-	-	-	-	-

The department has responsibility for administering the settlement process. This role is undertaken by the Electricity Settlements Company (ESC). The obligation for ESC to make capacity payments only arises when the respective levy is received from licensed suppliers and the generator provides the agreed level of capacity. The potential income and payments arising from these arrangements are outlined in the following table.

Reconciliation of contingent liabilities included in the supply estimate to the accounts (unaudited)

A reconciliation of differences between contingency liabilities reported in the supply estimates and those report in the annual report and accounts are set out below. Further detail on the contingent liabilities can found be in note 25 Contingent Liabilities and in the Supplementary Estimates 2022-23.

Quantifiable contingent liabilities

Description	Amount per supply estimate (£’000)	Amount disclosed in ARA (£’000)	Variance
Core department - Energy Price Guarantee (EPG)	6,000	Unquantifiable	See note explaining variance in contingent liabilities relating to the Energy Schemes[Note 1]
Core department - Energy Bills Support Scheme (EBSS) and Alternative Fuel Payment (AFP) in Northern Ireland	3,125	Schemes split below	See note explaining variance in contingent liabilities relating to the Energy Schemes[Note 1]
Core Department – Energy Bills Support Scheme Alternative Funding	Included above	19,000	See note explaining variance in contingent liabilities relating to the Energy Schemes[Note 1]
Core Department – Energy Price Guarantee Alternative Fuel Payment Alternative Fund	Included above	13,000	See note explaining variance in contingent liabilities relating to the Energy Schemes[Note 1]
Core department – Non-Domestic Alternative Fuel Payment Scheme	Included above	1,700	See note explaining variance in contingent liabilities relating to the Energy Schemes[Note 1]
Core department – Energy Price Guarantee Pre-Payment Meter	Included above	59,000	See note explaining variance in contingent liabilities relating to the Energy Schemes[Note 1]
BBB – Financial guarantees under Help to Grow programme	3,000	Not disclosed	Expired as at 31 March 2023
UKRI – BBSRC exit costs	31,000	Not disclosed	Expired as at 31 March 2023
UKRI - Innovate UK Natural Renewable Energy Centre decommissioning costs	2,600	2,200	£0.4 million movement due to change in estimate
UKRI - European Synchrotron Radiation Facility decommissioning costs	1,800	1,700	£0.1 million movement as a result of the costs changing in the year changing alongside foreign exchange movements
UKRI - STFC share of Institut Laue-Langevin (ILL) unfunded provision for staff related costs and decommissioning on closure	10,400	10,500	£0.1 million movement as a result of the costs changing in the year changing alongside foreign exchange movements
UKRI - NEOSTM satellite on loan from Airbus	Not disclosed	2,500	Contingent liability arose during the period

Unquantifiable contingent liabilities

Description	Included in the supply estimates	Disclosed in the ARA	Explanation of difference
Core department - Horizon 2020 Funding	Unquantifiable	Not disclosed	Expired as at 31 March 2023
Core department - Energy Bills Discount Scheme	Included above	Unquantifiable	See note explaining variance in contingent liabilities relating to the Energy Schemes[Note 1]
CNPA - Multi Force Shared Service (MFSS) redundancy costs	Unquantifiable	Not disclosed	Expired as at 31 March 2023
UKRI - HMRC enquiry into corporation tax on taxable profits	Unquantifiable	Not disclosed	Expired as at 31 March 2023
NDA – Renewal of an uncapped indemnity in the Sellafield Replacement Sea Line (RSL) Lease	Not disclosed	Unquantifiable	Contingent liability arose during the period

Notes:

1. During the year, the department notified Parliament of contingent liabilities arising related to the EPG, EBSS and AFP. Further work has been done to develop the support scheme policy, and correctly classify and quantify the contingent liabilities which has resulted in a variance between amount per the supply estimate and amount disclosed in the ARA.

Regularity of expenditure (audited)

The department ensures that the concept of regularity is understood and complied with in all its operational activities. It ensures compliance with HM Treasury’s Managing Public Money.

COVID-19 loan guarantees

The department’s work on recovering funds due to fraud is provided in the fraud and error section in the performance report. This section provides information on our estimates of fraud and error for the COVID-19 loan schemes.

As a result of the COVID-19 pandemic, the department entered into loan guarantee agreements with accredited lenders, providing support to businesses under:

• the Bounce Back Loan Scheme
• the Coronavirus Business Interruption Loan Scheme
• the Coronavirus Large Business Interruption Loan Scheme
• the Recovery Loan Scheme

Bounce back loan scheme:
Due to the imperative to deliver rapid support to businesses affected by the pandemic, ministers directed officials to implement a scheme design which would facilitate faster lending. This meant that the Bounce Back Loan Scheme (BBLS ) relied on self-certification of eligibility and included changes to usual lender controls. It was expected that there would consequently be a heightened risk of fraudulent borrowing and loans being issued in error. A statistical sampling exercise was undertaken in 2020-21, to provide an estimate of the level of fraud and error in the BBLS.

In 2020-21, a sample of 1,067 loans were examined and placed into differing categories based on the likelihood of fraud. This resulted in a central estimate for the incidence of fraud in the portfolio of 7.5% of facilities.

In 2021-22 further work to refine the fraud and error estimate was undertaken to consider other fraud risks not captured within the sample exercise (which was designed while the scheme was still live), and to make use of repayments data that was not previously available. Taken together, this new information indicates that the 7.5% is likely understating the fraud incidence in the scheme. However, there is currently insufficient evidence to support a quantified uplift to the estimate on the basis of these additional fraud risk indicators (this is detailed and discussed further in note 21). Therefore, the department has maintained the fraud estimate in the scheme at 7.50%, adjusted for additional facilities identified by lenders as fraudulent within the sampled population during 2021-22 and 2022-23. This increases the rate to 8.90%, although it acknowledges that the actual rate is likely to be higher and further measurement work would be required to reflect this and to meet Government Counter Fraud Function and Profession (GCFP) measurement standard, which requires that instances of fraud are identified for all risk indicators. As BBLS is a closed scheme and the original scheme design did not enable pre-lending identification of fraud to be identified for all risk indicators, the Department would not be able to fully meet the requirements of GCFP standard without incurring undue cost and effort.

As well as refining the fraud incidence estimate, the department assessed the information that is available on repayments for the loans identified as probable fraud in the above sample, in order to estimate the losses resulting from estimated fraud incidence. The fraud estimate has been reduced to 66.32% to take into account the potential rate of loss that could occur as a result of those loans identified as probable fraud. This equates to 5.9% lifetime fraud and error rate.

BBLS lifetime fraud rate estimate for loans provided since inception

	31 Mar 2023	31 Mar 2022
Lifetime estimate of fraud and error loss	5.90% £1,743m	4.24% £1,305m

Significant uncertainties remain around the estimate. It is widely acknowledged that there are additional risk indicators (not included in the sampling exercise which underpins the current estimate) which will increase the estimate of the incidence of fraud and error in the scheme and therefore increase the estimate of losses, as the portfolio matures. Furthermore, lenders are undertaking more in-depth analytics on the non-performing facilities within their loan books which is also likely to result in the identification of additional incidences of suspected fraud and error. The challenge is quantifying these risks in a way that is sufficiently robust and allows the estimate to be updated based on verifiable evidence. Further information in relation to the uncertainties associated with the fraud estimate, as well as the estimated fraud rate for the outstanding loan portfolio are included in note 21.

Eventual losses of public funds due to fraud and error could and are expected to vary from the estimate noted above. The department will continue to refine its estimate of fraud and error and report on this in future annual reports.

Further details regarding the loan guarantees can be found in these notes to the accounts:

• accounting policies – note 1
• operating expenditure – note 4.1
• financial guarantee, loan commitment liabilities and re-insurance contracts – note 21

Coronavirus Business Interruption Loan Scheme, Coronavirus Large Business Interruption Loan Scheme, Recovery Loan Scheme:
Unlike BBLS which relied on self-certification of eligibility and did not have credit checks, for the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and Recovery Loan Scheme (RLS), lenders followed standard lending practices. Although neither the volume nor cadence of lending through the schemes was normal, the department’s judgement is that there are not material levels of fraud and error within CBILS, CLBILS and RLS as detailed further in note 21.

Repayments data which is available to date supports this assessment as there are currently low levels of claims and defaults across these 3 schemes, and low levels of payments in arrears. The table below shows the level of repayments data as at 31 March 2023 for CBILS and RLS, the only schemes of these 3 which have a liability that is material to the accounts.

Scheme	Outstanding facilities	Outstanding facilities paying on time	Outstanding facilities - Repayments in arrears	Outstanding facilities - Repayments in default	Facilities fully repaid
CBILS	£11.6 bn	66.7 %	1.43 %	5.07 %	26.8 %
RLS	£3.4 bn	87.72 %	1.88 %	6.97 %	3.43 %

The department will continue to monitor fraud and error on these schemes, along with continued monitoring of repayments as further information becomes available. This will support any adjustments required to our assumptions on fraud and error.

Further information on these schemes can be found in note 21 to the accounts. The actual losses for 2022-23 can be found in the section on ‘losses and special payments’.

COVID-19 business support grants

The department’s work on recovering funds due to fraud is provided in the fraud and error section in the performance report. This section provides information on our estimates of fraud and error for the COVID-19 grant schemes.

The following COVID-19 business support grants schemes were provided in urgent response to the financial difficulties faced by businesses during the pandemic as a result of both regional and national lockdowns:

• Small Business Grant Fund (SBGF)
• Retail, Hospitality and Leisure Grant Fund (RHLGF)
• Local Authority Discretionary Grant Fund (LADGF)
• Various Local Restrictions Support Grants (LRSG)
• Christmas Support Package (CSP)
• Restart Grant
• Additional Restrictions Grants and various top-ups (ARG)
• Omicron Hospitality and Leisure Grant (OHLG)

The various LRSG schemes comprise:

• LRSG addendum (November)
• LRSG (open)
• LRSG (closed) pre-November 2020
• LRSG (closed) post 2 December
• Closed Business Lockdown Payment
• LRSG (closed) addendum
• LRSG sectors
• LRSG (closed) addendum - Tier 4

Due to the rapid turnaround in making funding available for businesses, it was expected there would be a degree of fraudulent claims, opportunistic behaviour and payments made in error outside of the scheme criteria, especially in the earlier schemes.

For the 2020-21 accounts, the department produced an initial estimate of irregular spend in the first 3 schemes (SBGF, RHLGF and LADGF). In 2021-22 work over these 3 schemes continued, resulting in a final refined estimate. The department also produced initial estimates of irregular expenditure in the remaining grant schemes in 2021-22, which has now been finalised in 2022-23.

These figures are estimates rather than the total actual identified irregular payments. The estimate for irregular expenditure is a statistical calculation only and is based on an exercise carried out by the department which involved re-completing local authority assurance checks on a random sample of payments for each scheme. The results of which have then been extrapolated to produce the estimated irregularity rates disclosed below. The actual value of irregular payments across the programme that have been identified by local authorities is significantly lower, a total of £78m having been notified to the department to date.

For all schemes, the checks performed involved assessing each sampled payment for eligibility against the grant scheme criteria. The estimates below represent irregularity overall and it is not possible to break them down into separate irregularity figures. The level of irregularity varies by scheme. The checks performed are not fully comprehensive as they cannot identify instances of complex fraud. This is why the department is undertaking a range of other counter fraud activities – described in the performance report.

Grant expenditure recognised in 2020-21: Small Business Grant Fund (SBGF); Retail Hospitality and Leisure Grant Fund (RHLGF); Local Authority Discretionary Grant Fund (LADGF):
The estimated level of irregularity in these COVID-19 grant schemes, for the 2020-21 accounts, was based on work carried out over the initial 3 schemes listed above. Payments were deemed either ‘not eligible’, ‘eligible’ or ‘possibly eligible’. In 2021-22, the department refined the estimated level of irregularity in these first 3 schemes. The central estimate of 8.4% (£985 million) shown in the table below is the department’s final estimate. The table also shows the initial 2020-21 estimate for comparison. Further details of this can be found in the department’s 2021-22 annual report and accounts.

SBGF, RHLGF and LADGF

	2021‑22 final estimate	2020‑21 initial estimate
Department expenditure	£11,659m (2020‑21)	£11,659m (2020‑21)
Sample size	4,476	476
Estimates
Central estimate	8.4% (£985m)	8.9% (£1,038m)
Lower bound (95% confidence interval)	7.6% (£890m)	4.4% (£514m)
Upper bound (95% confidence interval)	9.3% (£1,079m)	13.4% (£1,562m)

Grant expenditure recognised in 2020-21: Various Local Restrictions Support Grants (LRSG); Christmas Support Package (CSP):
The initial estimate included in the 2020-21 annual report and accounts for the level of irregularity in the SBGF, RHLG F and LADGF schemes was extrapolated across the LRSG , CSP, CBLP, ARG, and the first A R G top-up schemes. This is because there was insufficient time to develop a separate estimate for these schemes in time for the 2020-21 accounts.

As reported in the 2020-21 accounts, the department expected to find lower levels of irregular payments in the later schemes compared to the first 3. This was because the department provided increased guidance and support to local authorities administering these schemes. Local authorities also had the opportunity to learn from experience administering the initial schemes.

During 2021-22, the department started work to estimate the level of irregularity in the later schemes. As with the earlier schemes, the work involved reviewing a random sample of payments from each scheme for eligibility under the scheme criteria. The department used evidence from local authorities, publicly available information and lessons learned from the work on the earlier schemes. These estimates have now been finalised in 2022-23.

In 2020-21, expenditure recognised for the CSP scheme was £22.9 million. This was immaterial to the accounts and expenditure on the other schemes was significantly higher. Therefore, the department has focussed its efforts on the estimates for the more material schemes, where irregular payments are likely to have a higher total value.

Grant expenditure recognised in 2020-21: various LRSG schemes:
The table below sets out the estimates of irregularity in the LRSG schemes. The results presented here provide a guide to the levels of irregularity in these schemes. All checks on the sample have now been completed.

	2022‑23
Department expenditure	£5,350m[Note 1]
Sample size	6,917
Estimates
Central estimate	0.5% (£29.4m)
Lower bound (95% confidence interval)	0.4% (£20.0m)
Upper bound (95% confidence interval)	0.7% (£38.8m)

Notes:

1. Updated expenditure figure is £5,350 million based on 31st March 2023 position, as detailed in note 1.26.
   
   In the department’s 2021-22 accounts, an early estimate for LRSG irregularity was published. It was noted that the very small sample size meant that there was a degree of uncertainty attached the estimates disclosed. The department has now concluded the sample of checks planned and the above results conclude the department’s work to determine its estimate of irregular payments in the various LRSG schemes. A total of c. 2.2 million grant payments were made for the LRSG and CSP grant schemes; the sample of 6,917 payments analysed represents 0.3% of all payments. The results above therefore provide the department’s final estimate over the level of irregularity in these schemes. Work has already begun to recover those payments which have been identified as ‘not eligible’.

Grant schemes with expenditure recognised in 2021-22: Restart, Additional Restrictions Grants (ARG), Omicron Hospitality and Leisure Grant (OHLG):
Expenditure was initially recognised in 2021-22 for the following grant schemes: Restart, ARG including various top-up schemes, and OHLG. Below are the department’s final estimates of the level of irregularity in these grant schemes. The results presented here provide a guide to the levels of irregularity in these schemes.

	2022‑23 Restart	2022‑23 ARG	2022‑23 OHLG	2022‑23 Total
Department expenditure[Note 1]	£3,038m	£2,118m	£483m	£5,639m
Sample size	1,209	1,957	447	3,613
Estimates
Central estimate	0.3% (£10.1m)	0.4% (£7.6m)	0.7% (£3.2m)	0.4% (£20.9m)
Lower bound (95% confidence interval)	<0.1% (£0.0m)	0.1% (£1.6m)	<0.1% (£0.0m)	<0.1% (£1.7m)
Upper bound (95% confidence interval)	0.7% (£21.0m)	0.6% (£13.5m)	1.5% (£7.4m)	0.7% (£41.9m)

Notes:

1. The expenditure included in the table represents the adjusted expenditure totals under these schemes in 2022-23. This is considering further reconciliation where the department has established whether local authorities have spent all of their allocation under each scheme.

For each scheme, the department reviewed a random sample of payments, and each was categorised as ‘eligible’ or ‘not eligible’. In the small number of instances where evidence was not provided by local authorities, the department have categorised these as ‘not eligible’.

Local authorities continued to distribute funds for OHLG, ARG and Restart until the end of March 2022. The department worked with local authorities to collect data for the reconciliations faster than for the earlier schemes. However, the late scheme closure reduced the time available to review the payments and form the irregularity estimate for the 2021-22 annual report and accounts. Work has continued throughout 2022-23 to produce the final estimate.

Where the local authority reconciliation was not yet complete, monitoring and evaluation data was instead used to select the sample. This data was collected throughout the year and represented over 80% of payments. There is a possibility that this biases the results, although the department has no evidence to believe this is the case.

ARG expenditure was recognised in 2020-21 and in 2021-22 because several top-ups of the scheme were issued. The scheme guidance for each top-up was very similar and local authorities retained high levels of discretion for the businesses that would receive the funding and therefore the department has assumed that the rate of irregularity across each top-up would not vary significantly. As the estimate of irregularity is for the scheme in totality, the scheme is included in full in the table above.

The ARG scheme gave local authorities high levels of discretion to set their own eligibility criteria to fit local circumstances. This estimate is based only on eligibility against criteria mandated by the department. Local authorities will have also set their own additional criteria for eligibility, which the department has not reviewed.

A total of around 1.3 million grant payments were made for the OHLG, ARG and Restart grant schemes. The sample of 3,613 payments analysed represents 0.3% of all payments.

The results show a significant decrease in the estimated levels of irregularity in the later grant schemes, compared to the initial 3 grant schemes (SBGF, LADGF, RHLGF). This may be a result of clearer scheme guidance, articulating more clearly who is eligible to receive the payments; stronger requirements for local authorities to perform pre-payment checks; and better clarity on the information the department would require from local authorities to evidence that a payment was eligible.

Renewable heat incentive grant scheme

The value of payments made in error during 2022-23 under the core department GB Renewable Heat Incentive Scheme is estimated at £7.2 million (0.7% of total payments) within a 95% confidence interval of £5.1 million to £9.3 million. Applied to the expenditure total of £1,001 million (which represents the value of payments made in 2022-23, adjusted for net movements on accrued amounts payable) this would give an estimate of potential error of £7.1 million within a 95% confidence interval of £5.0 million to £9.2 million. This assumes the same error rate would be incurred on the accrued expenditure when it is paid.

Sarah Munby
Permanent Secretary and Principal Accounting Officer

10 October 2023

The certificate and report of the Comptroller and Auditor General to the House of Commons

Opinion on financial statements

I certify that I have audited the financial statements of the Department for Business, Energy and Industrial Strategy (‘the Department’) and of its Departmental Group for the year ended 31 March 2023 under the Government Resources and Accounts Act 2000. The Departmental Group consists of the Department and the bodies designated for inclusion under the Government Resources and Accounts Act 2000 (Estimates and Accounts) Order 2022. The financial statements comprise the Departmental Group’s:

• Statement of Financial Position as at 31 March 2023
• Statement of Comprehensive Net Expenditure, Statement of Cash Flows and Statement of Changes in Taxpayers’ Equity for the year then ended; and
• the related notes including the significant accounting policies

The financial reporting framework that has been applied in the preparation of the Group financial statements is applicable law and UK adopted international accounting standards.

In my opinion, the financial statements:

• give a true and fair view of the state of the Department and the Departmental Group’s affairs as at 31 March 2023 and its net expenditure/(income) for the year then ended; and
• have been properly prepared in accordance with the Government Resources and Accounts Act 2000 and HM Treasury directions issued thereunder

Opinion on regularity

In my opinion, in all material respects:

• the Statement of Outturn against Parliamentary Supply properly presents the outturn against voted Parliamentary control totals for the year ended 31 March 2023 and shows that those totals have not been exceeded; and
• the income and expenditure recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them

Basis for opinions

I conducted my audit in accordance with International Standards on Auditing (UK) (ISAs UK), applicable law and Practice Note 10 ‘Audit of Financial Statements and Regularity of Public Sector Bodies in the United Kingdom’ (2022). My responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial statements’ section of my certificate.

Those standards require me and my staff to comply with the Financial Reporting Council’s ‘Revised Ethical Standard 2019’. I am independent of the Department and its Group in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK. My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. The framework of authorities described in the table below has been considered in the context of my opinion on regularity.

Framework of authorities

Authorising legislation:

• Government Resources and Accounts Act 2000
• The Industrial Development Act 1982
• The Energy Act 2004 and The Energy Act 2013
• The Contracts for Difference Order and Regulations 2014
• The Higher Education and Research Act 2017
• The Coronavirus Act 2020
• The Energy Prices Act 2022

Parliamentary authorities:

• Supply and Appropriations Act 2022

HM Treasury and related authorities:

• Managing Public Money

Conclusions relating to going concern

In auditing the financial statements, I have concluded that the Department and its Group’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work I have performed, I have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Department or its Group’s ability to continue as a going concern for a period of at least 12 months from when the financial statements are authorised for issue.

My responsibilities and the responsibilities of the Accounting Officer with respect to going concern are described in the relevant sections of this certificate.

The going concern basis of accounting for the Department and its Group is adopted in consideration of the requirements set out in HM Treasury’s Government Financial Reporting Manual, which requires entities to adopt the going concern basis of accounting in the preparation of the financial statements where it is anticipated that the services which they provide will continue into the future.

Overview of my audit approach: Key audit matters

Key audit matters are those matters that, in my professional judgment, were of most significance in the audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditor, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of the audit of the financial statements as a whole, and in forming my opinion thereon. I do not provide a separate opinion on these matters.

I consider the key audit matters below to be those matters that had the greatest effect on my overall audit strategy, the allocation of resources in my audit and directing the efforts of the audit team in the current year. These matters were addressed in the context of my audit of the financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on these matters.

This is not a complete list of all risks identified though the course of my audit but only those areas that had the greatest effect on my overall audit strategy, allocation of resources and direction of effort. I have not, for example, included information relating to the work I have performed around: management override of controls, other than to the extent where this was part of my work on significant estimates made by management as set out below; the accuracy and completeness of group consolidation adjustments and eliminations; the valuation of the Future Fund; the presumed risk of fraud in revenue recognition in NDA ; events after the reporting period; or work performed on commitment and financial instrument disclosures, where my work has not identified any matters to report.

The key audit matters were discussed with the Audit and Risk Committee; its report on matters that it considered to be significant to the financial statements is set out on pages 80-81.

Group valuation of nuclear provisions

Refer to Note 20 Provisions for liabilities and charges - NDA nuclear decommissioning liabilities as at 31 March 2023 £125.2 billion (2021-22: £236.8 billion).

Description of risk:
The Departmental Group holds nuclear decommissioning provisions from the Nuclear Decommissioning Authority (NDA) which is comprised of several individual estimates of the decommissioning costs associated with the NDA’s subsidiaries and for several additional sites and entities. The nuclear provisions are valued at an undiscounted liability of £173 billion as at 31 March 2023 (see note 20.1 for further information). The nuclear provisions are inherently uncertain due to the requirement for management to estimate the cost of decommissioning facilities of uncertain content and condition over long timescales as the programme of decommissioning work is currently planned to take until 2137. Specifically, the Sellafield estimate is subject to a wide range of judgments, including uncertainties on plutonium strategy, adjustments to improve cost estimates associated with immature projects, and required savings to be achieved by Sellafield.

How the scope of my audit responded to the risk:
In relation to the valuation of the nuclear provisions I performed the following procedures:

• challenged the change control process by which changes are made to the Lifetime Plans underpinning each site’s provision
• assessed management’s processes for challenging key assumptions across the nuclear provisions
• challenged the peer review process over the nuclear provision model
• tested the supporting evidence for key judgements and assumptions made by management in valuing nuclear provisions, including management’s response to changes in circumstances since the prior year. In particular I monitored strategy developments, such as the approach to providing for the Geological Disposal Facility, and whether the provision represents management’s best estimate based on evidence available at the reporting date
• assessed and challenged management on the key assumptions in respect of material amounts provided in-year, including using external experts to assess the reasonableness of the more technical assumptions;
• agreed the inputs to the nuclear provision to supporting evidence, including change controls raised and annual submissions provided by subsidiaries;
• assessed management’s application of the data, methodology, and modelling previously agreed to revenue recognised from long term contracts;
• assessed the NDA’s approach to addressing estimation uncertainty in its cost estimates in the provision by taking a granular approach to assess the merits of the approaches used across the different elements of the provision;
• assessed the accuracy and completeness of utilisation of the provision as reported within the financial statements;
• assessed the completeness of the provision, by reference to sanction approvals and other developments; and
• assessed the disclosures over the provision within the financial statements, particularly in how they address estimation uncertainty

Key observations:
In the course of completing this work I did not identify any material misstatements.

I do, however, draw attention to the disclosures made in notes 1.26 and 20.1 to the financial statements concerning the uncertainties inherent in the nuclear decommissioning provisions. As set out in these notes, given the very long timescales involved and the complexity of the plants and materials being handled, a considerable degree of uncertainty remains over the value of the liability for decommissioning nuclear sites designated by the Secretary of State. Significant changes to the liability could occur as a result of subsequent information and events which are different from the current assumptions adopted by the Nuclear Decommissioning Authority.

Group valuation of Contracts for Difference

Refer to Note 10 Derivative financial instruments – Net liability of Contracts for Difference as at 31 March 2023 £13.4 billion (2021-22: £126.9 billion).

Description of risk:
The Departmental Group holds Contracts for Difference (CfD) which are financial instruments intended to support investment in low carbon energy generation. These are classified as derivatives under I F R S 9. At 31 March 2023, the disclosed fair value of the liability was £84.5 billion. The Statement of Financial Position disclosed £6.1 billion of contracts in an asset position, with £19.6 billion in a liability position.

The measurement of the fair value of CfD liabilities is a Key Audit Matter because of the degree of estimation uncertainty inherent in forecasting generation volumes and wholesale prices into the 2030s and the material values involved. The long-term forecasts used by the Low Carbon Contracts Company (LCCC) to value the CfD liabilities require a series of significant judgements that are both complex and highly subjective and are susceptible to developments in the energy markets and changes in government policy.

Specifically, the Contract for Difference for Hinkley Point C (HPC) (disclosed fair value of liabilities was £59.6 billion at 31 March 2023 with £8.7 billion recognised in the Statement of Financial Position), has a contract duration more than double (35 years) the length of other CfDs (typically 15 years) entered into by the company. The fair value estimate for the HPC CfD reflects the company’s assumptions around future nuclear generation, specifically construction of Sizewell C. In prior years, management’s assumption was that a CfD (or equivalent) in relation to Sizewell C would not be entered into before the HPC reactor 1 start date and this was reflected in the HPC strike price, which is the agreed sale price per unit of electricity generated per the contract. Due to events in year related to Sizewell C and set out in Note 10.4.4, management have revised this assumption and accordingly adjusted the HPC strike price downwards. This has the impact of materially decreasing the HPC CfD liability.

How the scope of my audit responded to the risk:
A key element of the CfD valuation is the forecast of future electricity prices. In 2022-23, an alternative provider for the future forecast electricity prices has been used and I used an auditor’s expert to help assess the appropriateness of this.

In relation to the valuation of the Contracts for Difference, I performed the following procedures:

• assessed the reasonableness of the future forecast electricity price series via consultation with industry experts
• reviewed other model assumptions and inputs, vouching these to contracts or benchmarking them to independent information and analysis where possible
• reperformed the modelling to develop an auditor’s valuation to evaluate management’s point estimate
• compared the outputs from LCCC’s valuation model to the workings and journals underpinning the financial statements; and
• reviewed the disclosures included in the financial statements in relation to the CfDs

Key observations:
For the first time at 31 March 2023, there are CfDs with a positive fair value which are collectively material to the financial statements and there are CfDs for which there has been a positive movement in the assessed fair value since initial recognition, which are collectively material to the financial statements.

I am content that management has made a reasonable estimate and presented the valuation, as well as the associated sensitivity disclosures, appropriately. I did not identify any material misstatements.

I do, however, draw attention to the disclosures made in notes 1.19 and 10 to the financial statements concerning the measurement of liabilities relating to CfDs. As set out in these notes, there is a high degree of estimation uncertainty inherent in forecasting electricity generation volumes and wholesale electricity prices into the late 2030s (and 2060s for the purposes of the Hinkley Point C CfD) and there is a great deal of subjectivity involved in selecting a wholesale electricity price forecast input that conforms to the principles of fair value. The fair value estimate is particularly sensitive to other assumptions, including the rate applied to discount projected future difference payments. Significant changes to the liability could occur as a result of subsequent information and events which are different from the current assumptions adopted.

Measurement of COVID 19 guarantees (including related fraud and error)

Refer to Note 21 Financial guarantees, loan commitment liabilities and reinsurance contracts – financial guarantee liabilities as at 31 March 2023 £11.3 billion (2021-22: £15.8 billion).

Description of risk:
The Department launched 4 guarantee schemes; Bounce Back Loans Scheme (BBLS), Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and Recovery Loan Scheme (RLS) in response to the COVID 19 pandemic. The Department measures the guarantee schemes at the Lifetime Expected Credit Loss (ECL) for each facility.

COVID 19 Financial Guarentee Schemes liabilities as at 31 March 2023 (£m)

Diagram data:

• BBLS - £9,708m
• CBILS - £1,102m
• CLBILS - £52m
• RLS - £422m

The COVID-19 guarantee schemes are material to the financial statements, with BBLS being the largest at £9.7 billion. These schemes are driven by significant estimation judgements by management and its experts. The modelling of ECL on the schemes is complex due to the large number of data inputs and calculations required to forecast the expected credit loss. Lenders keep key data up to date within a lender portal, this forms the core data used in the model. Some of the other inputs into the ECL are driven by macroeconomic assumptions which are inherently difficult to accurately predict. In 2022-23 management included a material Post Model Adjustment (PMA) to take account of the current high inflation economic environment.

When BBLS was introduced, it was subject to an estimated material level of fraud. Management’s estimate of the level of fraud is a key, highly judgemental assumption in the model given the inherent challenges identifying cases of fraud and forming an extrapolated estimate.

How the scope of my audit responded to the risk:
I performed the following procedures to address the significant risk in the valuation of the COVID-19 Financial Guarantees ECL and the risk of fraud and error within the schemes:

• updated our understanding of controls and processes of the lender portal, including walkthroughs to assess the effectiveness of controls within the lender portal;
• engaged internal experts to challenge the methodology and management’s inflation PMA;
• engaged external experts to review the model methodology underpinning the 4 schemes and reviewing the methodology behind the inflation PMA with a focus on benchmarking management’s methodology against market practices;
• assessed management’s accounting treatment of the COVID-19 Financial Guarantees ECL;
• assessed management’s estimate of the fraud rate within BBLS; and
• completed substantive testing on the lender portal to ensure data reconciles with data provided by commercial lenders via lender circularisations.

Key observations:
The valuation of the COVID-19 Financial Guarantees ECL and the assumptions in relation to fraud and error within the schemes, are appropriately disclosed. I did not identify any material misstatements.

However, I draw attention to the disclosures made in notes 1.26 and 21 to the financial statements concerning the measurement of the Department’s liability under the Bounce Back Loan guarantee scheme. As described in note 21, the guarantee liability recognised in these financial statements is the present value of the amount that the Department expects to pay to lenders to settle claims made in accordance with scheme rules, which has been measured in accordance with the lifetime expected credit loss requirements of IFRS 9 as instructed per the HM Treasury adaptation of the Government Financial Reporting Manual (FReM). As note 21 describes, the measurement of the guarantee liability is highly sensitive to assumptions regarding probability of default, and loss given default, with particular sensitivity to assumptions regarding the rate of fraud and error occurrence and associated loss. The Department has taken into account all reasonable and supportable information at the reporting date in estimating the guarantee liability recognised in the financial statements, however, as disclosed in note 21, there are a number of additional risk indicators for which the Department is unable to quantify the impact on the liability due to current data limitations.

Recognition and measurement of support to Bulb

Refer to Note 11.3 Loans to public sector bodies – Bulb financial asset as at 31 March 2023 £2.4 billion (2021-22: £0 million).

Description of risk:
Under the special administration regime (SAR) of the energy supplier Bulb, the Department provided payments to the administrators to ensure continued supply of energy to Bulb customers. This arrangement ran until 20 December 2022, when Bulb was sold to Octopus Energy. Following the sale, the terms of the SAR were amended which saw the Department continuing to provide funding of the SAR’s costs in addition to providing cash advances to Octopus Energy to purchase energy for ex-Bulb customers until March 2023. The payments the Department has made during 2022-23 under the original and amended SARs are material to the financial statements and are complex to value. As the advances are due to be repaid by September 2024, the Department also had to make assumptions and apply judgements in relation to the fair value of the asset recognised in respect of the advances to Octopus at the reporting date.

How the scope of my audit responded to the risk:
I performed the following procedures in relation to the expenditure recognised and the valuation of the financial asset:

• obtained an understanding and performed walkthroughs of management’s key controls in place for making payments to Bulb under the agreements;
• tested the completeness and accuracy of payments made to Bulb under the agreements;
• assessed the accounting treatment proposed by management for the pre and post-sale agreements against the requirements of the relevant standards;
• challenged the methods, data and assumptions used to calculate the fair value of the financial asset at the reporting date;
• assessed the competence, capabilities, and objectivity of management’s expert engaged to calculate the fair value of the financial asset;
• reviewed the impact of the updated S A R arrangements and payments including any matters arising after the reporting date on the 2022-23 accounts; and
• inquired about the Bulb judicial review held in February 2023 and the impact the outcome had on the accounting treatment and if any additional transactions should be recognised or disclosed in the 2022-23 Annual Report and Accounts.

Key observations:
I concluded that the fair value of the financial asset held as at 31 March 2023, and the transactions incurred during the financial year, are accurate and appropriately valued. I did not identify any material misstatements.

Recognition and measurement of the energy support schemes

Refer to Note 4.4 Grant expenditure, Note 20.2 Other provisions and Note 25 Contingent Liabilities – energy subsidies expenditure for the year ended 31 March 2023 £40.4 billion (2021-22: £0) and energy scheme provisions at 31 March 2023 £3.1 billion (2021-22: £0).

Description of risk:
Customers in Great Britain and Northern Ireland in response to surging energy prices: the Energy Price Guarantee (EPG), the Energy Bill Relief Scheme (EBRS), the Energy Bill Support Scheme (EBSS), and the Alternative Fuel Payment scheme (AFP). The unique nature of this intervention in response to very high energy prices in the winter of 2022-23, including the novel characteristics and non-commercial nature of the schemes, required management to make judgements in determining the accounting policies for recognition and measurement of these schemes. There is a risk that the Department selects policies that do not fairly present the substance of the schemes. Additionally, the speed at which these different and, in some cases, complex schemes were rolled out increased the risk of fraud and error in the payments made to suppliers. A further scheme, the Energy Bills Discount Scheme (EBDS), was also announced in 2022-23. This will run from April 2023 for 1 year and replaces the EBRS scheme which ended in March 2023. It aims to provide more targeted support to non-domestic energy customers.

The EBRS scheme which provides support to non-domestic customers, is complex due to the large number of energy suppliers in this market, the wide range of contracts available to customers and, unlike EPG, there is no price cap for non-domestic customers. Unlike domestic schemes, there is no typical customer that would support a less complex modelling approach. Non-domestic energy contracts are arranged through brokers, and energy regulators do not have the same relationships with non-domestic energy suppliers as they have with domestic suppliers who administer the price cap.

BEIS also administer the Northern Ireland energy schemes. These have different risks compared with the rest of the UK as this market is subject to different payment mechanisms and regulatory oversight.

Even though announcements relating to policy change after the reporting date have become the responsibility of the Department for Energy Security and Net Zero, the Department has appropriately disclosed these in Note 19 Events after the reporting period in these financial statements.

How the scope of my audit responded to the risk:
In relation to the valuation of the energy schemes I performed the following procedures:

• documented and tested the controls the Department have in place over the claimed payments including those which ensure the regularity of those payments. This testing includes IT controls, pre-payment checks and ongoing monitoring of payments to suppliers
• tested a sample of expenditure and year end balances including amounts provided for to cover payments relating to the EPG scheme in 2022-23 and the expected costs of the EBDS scheme +challenged the Department’s basis for selection of accounting policies and treatment for each of the schemes against the relevant accounting standards. This challenge particularly included consideration of the requirement to recognise a liability at 31 March 2023 for future payments under the EPG scheme
• reviewed disclosures, including those relating to events after the reporting period; and
• tested year end liabilities and balances relating to the schemes

Key observations:
In the course of completing this work I did not identify any material misstatements. I am satisfied that the Department has adequate controls in place to prevent and detect irregularity, including due to fraud. I am content that accounting policy choices and disclosures made by the Department fairy reflect the substance of the schemes.

Machinery of Government Change

Refer to Note 1.1 Basis of accounting.

Description of risk:
On 7 February 2023, the government announced that substantially all of the Department’s functions would be split into 3 new Departments: the Department for Energy Security and Net Zero; the Department for Business and Trade; and the Department for Science, Innovation and Technology. HM Treasury directed that as the supply estimate process had closed, the Department would continue to prepare their financial statements under the previous framework until 31 March 2023. The timing difference between the immediate operational machinery of government change and the change for accounting purposes means management had to make additional judgements around the completeness of disclosure in the final 2022-23 annual report and accounts. Particular areas of judgement were on the application of the going concern basis to the accounts; the accuracy of disclosures of senior staff changes within the Remuneration Report and the completeness; and relevance of disclosure of events after the reporting period.

How the scope of my audit responded to the risk:
In relation to the machinery of government change, I performed the following procedures:

• evaluated the Department’s assessment that the functions delivered by BEIS will continue to be provided by the successor departments to ensure it is appropriate to apply the going concern basis to these accounts
• performed detailed testing to agree disclosures made in the Remuneration Report to announcements made by government and to payroll records
• reviewed announcements made by successor departments and wider government to assess the completeness of events after the reporting period impacting the ongoing delivery of activities delivered by BEIS

Key observations:
In the course of completing this work I did not identify any material misstatements or omissions from the financial statements. The disclosures in the Remuneration Report are properly prepared.

Accounting for the Department’s investment in Sizewell C

Refer to Note 7 Property, plant and equipment – Sizewell C consolidated asset under construction as at 31 March £839 million (2021-22: £0).

Description of risk:
The Department has paid £363 million to acquire 40.4% of Sizewell C (Holding) Ltd during 2022-23. Sizewell C (Holding) Ltd is the holding company of Sizewell C Ltd whose principal activity is the construction and operation of a nuclear power station. The net assets of Sizewell C have been consolidated into the Departmental group for the first time in 2022-23 following direction from HM Treasury. The net assets of Sizewell C principally consist of a material asset under construction relating to capitalised early development costs. The acquisition of control of a private sector company is novel in central government accounting, which increases the risks around accuracy of consolidation and sufficiency of related disclosures.

How the scope of my audit responded to the risk:
In relation to the acquisition of Sizewell C, I performed the following procedures:

• obtained and reviewed the direction from HM Treasury to consolidate Sizewell C into the Departmental group accounts in 2022-23; and
• assessed the sufficiency and consistency of disclosures related to Sizewell C throughout the Department’s financial statements in relation to the uncertainty around the Final Investment Decision

Key observations:
In the course of completing this work, I did not identify any material misstatements or omissions from the disclosures presented in the financial statements.

Group valuation of Defined Benefit Pension Schemes

Refer to Note 22 Retirement benefit obligations – Group net pension surplus as at 31 March 2023 £1.7 billion (2021-22: £223 million).

Description of risk:
The Departmental Group financial statements include assets and liabilities associated with 9 funded defined-benefit pension schemes from the Nuclear Decommissioning Authority (NDA) and UK Research and Innovation (UKRI). The gross assets and liabilities of these schemes as at 31 March 2023 are £7.4 billion and £5.7 billion respectively (see note 22 for further information). The net pension surplus is a material balance and relies on actuarial valuations of the pension liabilities, which are subject to estimation uncertainty and are based on significant assumptions, as well as estimations of the value of the pension asset portfolios, which include hard-to-value assets including private equity and investment funds.

How the scope of my audit responded to the risk:
In relation to the valuation of the defined benefit pension schemes for UKRI and NDAI performed the following procedures:

• assessed the independence, capability and competence of the scheme actuaries used to provide valuations of scheme liabilities to ensure the auditor can place reliance on their work as management’s experts
• considered the appropriateness of key assumptions used to value scheme liabilities through the engagement of actuarial experts and benchmarking against similar assumptions set by other N A O audited bodies
• performed data verification testing on the scheme membership data; and
• performed substantive testing of scheme assets using relevant reports from fund managers, audited fund accounts, transactions in the fund around the reporting date and relevant controls reports to ensure the valuations as at 31 March 2023 were appropriate

Key observations:
Based on the evidence I obtained I found that the I A S 19 valuations provided by the scheme actuaries provided a reliable basis for estimating the retirement benefit obligation.

My work over scheme assets found that the disclosed scheme asset values are materially accurate. The net asset position of the schemes represents an amount the Department would reasonably be expected to recover.

In the course of completing this work I did not identify any material misstatements.

Group valuation of the fair value through profit and loss investments (FVTPL) investments held in BBB

Refer to Note 12 Other financial assets – Group investment in funds as at 31 March 2023 £3.9 billion (2021‑22: £3.7 billion).

Description of risk:
British Business Bank (BBB) holds a significant volume of investments in funds and direct investments which are classified and measured at fair value through profit and loss for financial reporting purposes (£3 billion at 31 March 2023), and are consolidated into the Departmental Group financial statements. The valuation of the investments in funds is derived from the Limited Partnership Agreements where each fund manager is required to provide fund valuations for the underlying fund assets at fair value. Some of these are non-coterminous audited valuations or unaudited fund manager valuations which means there is a risk that the valuations do not comply with guidance or that methods, judgements or assumptions used in determining the fair value of fund assets are not appropriate. Fair value measurement of funds holding significant private equites also typically carry higher levels of estimation uncertainty than funds that invest mainly in debt instruments, and that estimation uncertainty can become even higher in periods of economic uncertainty.

How the scope of my audit responded to the risk:
In relation to the risk of material misstatement in the valuation of the investments held in BBB I have performed the following procedures:

• assessed the controls applied by B B B over the valuation process for investments;
• assessed the reasonableness of the valuation methodology applied for estimating the fair value (using net asset values reported by the fund manager)
• confirmed that management’s estimate has been accurately prepared by reconciling it to fund manager reports at 31 March 2023
• assessed the reliability of the fund managers quarterly reporting in accordance with the requirements of ISA (UK) 402 Service Organisations
• considered whether the unaudited valuation reported by the fund manager is consistent with other information available
• where the financial year of the fund is coterminous with that of BBB, I have agreed the valuation to the audited accounts of the fund and investigated any differences; and
• where the financial year of the fund is not coterminous with that of BBB I have:
  • agreed the audited accounts of the fund to the valuation report provided to B B B for the relevant period; and
  • where available obtained the Service Auditors Controls Report and evaluated whether this provides reliable evidence of the operating effectiveness of the fund managers transaction processing and valuation controls

Key observations:
Based on the evidence I obtained I found that the quarterly investment valuations provided by fund managers are a reliable basis for estimating the fair value of the groups’ investments in funds.

My work over the direct investments held by BBB found that they were valued in line with the requirements of IFRS 13.

In the course of completing this work, I did not identify any material misstatements.

Application of materiality

Materiality

I applied the concept of materiality in both planning and performing my audit, and in evaluating the effect of misstatements on my audit and on the financial statements. This approach recognises that financial statements are rarely absolutely correct, and that an audit is designed to provide reasonable, rather than absolute, assurance that the financial statements are free from material misstatement or irregularity. A matter is material if its omission or misstatement would, in the judgement of the auditor, reasonably influence the decisions of users of the financial statements.

Based on my professional judgement, I determined overall materiality for the Department and its group’s financial statements as a whole as follows:

	Overall materiality
Materiality for the group financial statements as a whole	£2.4 billion (2021-22: £4.6 billion)
Basis for determining materiality	2% of nuclear liabilities of £125,166 million
Rationale for the benchmark applied	The nuclear decommissioning provision is the largest item in the Departmental Group Statement of Financial Position and is of primary interest to users of the accounts as the largest and most complex balance being managed by the Department. Its valuation is subject to significant uncertainty arising from both the complexity of the decommissioning work to be performed and the very long timescales involved. I have therefore set materiality at a level intended to reflect my view that a greater level of precision would potentially overstate the confidence that users may place on using this information for their decision making.

	CfD materiality
Specific Group materiality applied to Contracts for Difference	£1 billion (2021-22: £1 billion)
Basis for determining the Contracts for Difference materiality	2% of Contracts for Difference fair value of £84,506 million – capped at £1 billion
Rationale for the benchmark applied	The fair value for Contracts for Difference is the second largest item in the Departmental Group Statement of Financial Position. The Contracts for Difference are of particular interest to users of the accounts as large financial instruments being used as a major policy intervention. The balances are highly volatile and sensitive to model assumptions outside of the Department’s control. The high level of uncertainty in the valuation of these derivative contracts informs my judgement that a separate materiality be applied that is reflective of this uncertainty and does not obscure user interest in other drivers of the financial statements.

	Departmental Group materiality
Additional Departmental Group materiality	£576 million (2021-22: £291 million)
Basis for determining Departmental Group materiality	1% of adjusted gross group expenditure
Rationale for the benchmark applied	Expenditure is used as the materiality benchmark for the general group materiality level because the Department’s main activities result in grant expenditure in line with their policy objectives – a key area of user interest. I have adjusted the expenditure benchmark to exclude the provision, financial guarantee and other liabilities expenses, because this line reflects valuation movements sensitive to external market movements. This approach is unchanged from 2021-22.

	Core Department materiality
The Core Department’s materiality	£575 million (2021-22: £290 million)
Basis for determining the Department’s materiality	1% of adjusted gross expenditure – capped below the group materiality level
Rationale for the benchmark applied	As for Additional Departmental Group materiality above.

I have determined that for audited disclosures included within the Remuneration Report; disclosure of N A O external audit fees; and any irregular income and expenditure, misstatements of a lesser amount than overall materiality could influence the decisions of users of the accounts given the sensitive nature of these areas to inaccuracies or omissions. I have therefore determined that the level to be applied to these components is £1,000.

Performance Materiality

I set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality of the financial statements as a whole. Group performance materiality was set at 75% of Group materiality for the 2022-23 audit (2021-22: 80%). In determining performance materiality, I considered the level of identified errors in prior periods, which have historically been low, and the level of uncorrected misstatements identified in the previous period.

Other Materiality Considerations

I observed significant increases in Departmental group materiality compared to the prior period due to the large increase in the Department’s expenditure in 2022-23 to deliver the energy support schemes.

Apart from matters that are material by value (quantitative materiality), there are certain matters that are material by their very nature and would influence the decisions of users if not corrected. Such an example is any errors reported in the Related Parties note in the financial statements. Assessment of such matters needs to have regard to the nature of the misstatement and the applicable legal and reporting framework, as well as the size of the misstatement.

I applied the same concept of materiality to my audit of regularity. In planning and performing my audit work to support my opinion on regularity and in evaluating the impact of any irregular transactions, I considered both quantitative and qualitative aspects that would reasonably influence the decisions of users of the financial statements.

Error Reporting Threshold

I agreed with the Audit and Risk Committee that I would report to it all uncorrected misstatements identified through my audit in excess of £1 million, as well as differences below this threshold that in my view warranted reporting on qualitative grounds. I also report to the Audit and Risk Committee on disclosure matters that I identified when assessing the overall presentation of the financial statements.

Total unadjusted audit differences reported to the Audit and Risk Committee would have increased net assets by £57 million.

Audit scope

The scope of my Group audit was determined by obtaining an understanding of the Department and its Group’s environment, including Department/Group-wide controls, and assessing the risks of material misstatement at the Group level.

The Department for Business, Energy & Industrial Strategy Group has total liabilities of £179 billion. The group’s significant components by size are the Nuclear Decommissioning Agency (NDA) and UK Research & Innovation (UKRI). The group’s non-significant components that hold specific balances that are significant to the group are the British Business Bank (BBB) and the Low Carbon Contracts Company (LCCC). These components hold the key assets and liabilities in the Group balances. I have audited the full financial information of the Core Department, as well as the group consolidation. The audits of all significant components, with the exception of the British Business Bank, were complete at the time of my completion of the group audit. As group auditor, I have gained assurance from the auditors of the significant and material components and engaged regularly on the group significant risks such as valuation of nuclear provisions in NDA; valuation of defined benefit pension schemes in NDA and UKRI; presumed risk of fraud in revenue recognition in NDA; valuation of Contracts for Difference (excluding Hinkley C) in LCCC; valuation of the Hinkley Point C Contract for Difference in LCCC; and valuation of the fair value through profit and loss investments held in BBB.

I covered 96% of the group’s gross expenditure and 97% of the group’s gross liabilities through audit work on significant components, with the remainder covered by analytical procedures performed on non-significant components. For most of these non-significant components, audit of the financial information was complete or well progressed at the point of my analytical procedures. Together with my audit work on consolidation adjustments, this work gave me the evidence I needed for my opinion on the group financial statements as a whole.

This work covered substantially all of the Group’s liabilities and gross expenditure, and together with the procedures performed at group level, gave me the evidence I needed for my opinion on the group financial statements as a whole.

	Gross liabilities of individual components of the Departmental Group (as at 31 March 2023)	Gross expenditure of individual components of the Departmental Group (as at 31 March 2023)
BEIS core	82%	80%
Significant Components (by risk and size)	15%	16%
Non‑significant Components	3%	4%

Other Information

The other information comprises information included in the Annual Report but does not include the financial statements and my auditor’s certificate and report thereon. The Accounting Officer is responsible for the other information.

My opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in my certificate, I do not express any form of assurance conclusion thereon.

My responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements, or my knowledge obtained in the audit or otherwise appears to be materially misstated. If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

Opinion on other matters

In my opinion the part of the Remuneration and Staff Report to be audited has been properly prepared in accordance with HM Treasury directions made under the Government Resources and Accounts Act 2000.

In my opinion, based on the work undertaken in the course of the audit:

• the parts of the Accountability Report subject to audit have been properly prepared in accordance with HM Treasury directions made under the Government Resources and Accounts Act 2000
• the information given in the Performance and Accountability Reports for the financial year for which the financial statements are prepared is consistent with the financial statements and is in accordance with the applicable legal requirements

Matters on which I report by exception

In the light of the knowledge and understanding of the Department and its Group and its environment obtained in the course of the audit, I have not identified material misstatements in the Performance and Accountability Reports.

I have nothing to report in respect of the following matters which I report to you if, in my opinion:

• Adequate accounting records have not been kept by the Department and its Group or returns adequate for my audit have not been received from branches not visited by my staff; or
• I have not received all of the information and explanations I require for my audit; or
• the financial statements and the parts of the Accountability Report subject to audit are not in agreement with the accounting records and returns; or
• certain disclosures of remuneration specified by HM Treasury’s Government Financial Reporting Manual have not been made or parts of the Remuneration and Staff Report to be audited is not in agreement with the accounting records and returns; or
• the Governance Statement does not reflect compliance with HM Treasury’s guidance

Responsibilities of the Accounting Officer for the financial statements

As explained more fully in the Statement of Accounting Officer’s responsibilities, the Accounting Officer is responsible for:

• maintaining proper accounting records
• providing the C&AG with access to all information of which management is aware that is relevant to the preparation of the financial statements such as records, documentation and other matters
• providing the C&AG with additional information and explanations needed for his audit
• providing the C&AG with unrestricted access to persons within the Department and its Group from whom the auditor determines it necessary to obtain audit evidence
• ensuring such internal controls are in place as deemed necessary to enable the preparation of financial statements to be free from material misstatement, whether due to fraud or error
• ensuring that the financial statements give a true and fair view and are prepared in accordance with HM Treasury directions made under the Government Resources and Accounts Act 2000
• ensuring that the annual report, which includes the Remuneration and Staff Report, is prepared in accordance with HM Treasury directions made under the Government Resources and Accounts Act 2000; and
• assessing the Department and its Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Accounting Officer anticipates that the services provided by the Department and its Group will not continue to be provided in the future

Auditor’s responsibilities for the audit of the financial statements

My responsibility is to audit, certify and report on the financial statements in accordance with the Government Resources and Accounts Act 2000.

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a certificate that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Extent to which the audit was considered capable of detecting non-compliance with laws and regulations including fraud

I design procedures in line with my responsibilities, outlined above, to detect material misstatements in respect of non-compliance with laws and regulations, including fraud. The extent to which my procedures are capable of detecting non-compliance with laws and regulations, including fraud is detailed below.

Identifying and assessing potential risks related to non-compliance with laws and regulations, including fraud

In identifying and assessing risks of material misstatement in respect of non-compliance with laws and regulations, including fraud, I:

• considered the nature of the sector, control environment and operational performance including the design of the Department and its Group’s accounting policies and key performance indicators
• inquired of management, the Department’s head of internal audit and those charged with governance, including obtaining and reviewing supporting documentation relating to the Department and its Group’s policies and procedures on:
  • identifying, evaluating and complying with laws and regulations;
  • detecting and responding to the risks of fraud; and
  • the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations including the Department and its Group’s controls relating to the Department’s compliance with the Government Resources and Accounts Act 2000, Managing Public Money and the Supply and Appropriation (Main Estimates) Act 2022
• inquired of management, the Department’s head of internal audit and those charged with governance whether:
  • they were aware of any instances of non-compliance with laws and regulations; and
  • they had knowledge of any actual, suspected, or alleged fraud
• discussed with the engagement team, including significant component audit teams, how and where fraud might occur in the financial statements and any potential indicators of fraud. I additionally consulted relevant internal and external specialists, including modelling and economics specialists regarding complex expected credit loss and provision models

As a result of these procedures, I considered the opportunities and incentives that may exist within the Department and its Group for fraud and identified the greatest potential for fraud in the following areas: revenue recognition, posting of unusual journals, complex transactions, bias in management estimates, including in the valuation of the Department’s liability for loan guarantee schemes. In common with all audits under I S A s (UK), I am required to perform specific procedures to respond to the risk of management override.

I obtained an understanding of the Department and Group’s framework of authority and other legal and regulatory frameworks in which the Department and Group operates. I focused on those laws and regulations that had a direct effect on material amounts and disclosures in the financial statements or that had a fundamental effect on the operations of the Department and its Group. The key laws and regulations I considered in this context included: Government Resources and Accounts Act 2000, Managing Public Money, Supply and Appropriation (Main Estimates) Act 2022, employment law, tax and pension legislation, the Energy Prices Act 2022, the Industrial Development Act 1982, the Coronavirus Act 2020, the Higher Education and Research Act 2017, the Energy Act 2004, the Energy Act 2013, the Contracts for Difference (Counterparty Designation) Order 2014, and the Contracts for Difference (Electricity Supplier Obligations) Regulations 2014.

I considered the Department’s assessment of the level of fraud and error and the regularity of expenditure in both the energy and COVID-19 support schemes.

Audit response to identified risk

To respond to the identified risks resulting from the above procedures:

• I reviewed the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described above as having direct effect on the financial statements
• I enquired of management, the Audit and Risk Committee and in-house legal counsel concerning actual and potential litigation and claims
• I reviewed minutes of meetings of those charged with governance and the Board and internal audit reports
• in addressing the risk of fraud through management override of controls, I tested the appropriateness of journal entries and other adjustments; assessed whether the judgements on estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business
• I reviewed the Department’s methodology, processes, verifying the data used and the appropriateness of the assumptions and judgements applied for material estimates presented within the Annual Report and Accounts, including those described in my key audit matters above
• I confirmed that relevant approvals required under Managing Public Money have been obtained by management, and that the disclosures required by Managing Public Money are complete and have been appropriately included within the financial statements; and
• I confirmed that the Department has complied with the Parliamentary control totals set out in the Supply and Appropriations (Main Estimates) Act 2022 by confirming that the outturn is within the limits approved by Parliament, that the allocation of amounts to those control totals is appropriate and that management have not vired amounts inappropriately between control totals

I also communicated relevant identified laws and regulations and potential risks of fraud to all engagement team members including internal specialists and significant component audit teams and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

A further description of my responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of my certificate.

Other auditor’s responsibilities

I am required to obtain appropriate evidence sufficient to give reasonable assurance that the Statement of Outturn against Parliamentary Supply properly presents the outturn against voted Parliamentary control totals and that those totals have not been exceeded. The voted Parliamentary control totals are Departmental Expenditure Limits (Resource and Capital), Annually Managed Expenditure (Resource and Capital), Non-Budget (Resource) and Net Cash Requirement.

I am required to obtain evidence sufficient to give reasonable assurance that the expenditure and income recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

I communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control I identify during my audit.

Report

I have no observations to make on these financial statements.

Gareth Davies
Comptroller and Auditor General

13 October 2023

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

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