Corporate report

Accountability report

Published 19 July 2018

Applies to England and Wales

Corporate governance report

Directors’ report

Land Registry Board

The remit of the Land Registry Board (LRB) is to support, advise, challenge and provide guidance. The LRB ensures good governance and public accountability, endorses the HM Land Registry strategy and assists the Chief Executive and Chief Land Registrar in his ultimate responsibility as Accounting Officer for the governance of HM Land Registry.

The LRB terms of reference which were first approved in 2012 were revised during 2015/16. They remained relevant during 2017/18.

The LRB met eight times in 2017/18.

The Chair, the Chief Executive and Chief Land Registrar and the Director of Finance and Business Services also held quarterly meetings with UK Government Investments (UKGI).

LRB membership
	Michael Mire (Chair)	Non-Executive Chair
	Diana Breeze	Non-Executive Board Member (from 8 January 2018)
	Tony Buffin	Non-Executive Board Member (from 8 January 2018 to 31 March 2018)
	Kirsty Cooper	Non-Executive Board Member (from 8 January 2018)
	Chris Morson	Non-Executive Board Member (from 8 January 2018)
	Doug Gurr	Non-Executive Board Member (from 9 February 2018)
	Angela Morrison	Non-Executive Board Member (from 20 March 2018)
	Claire Wren	Non-Executive Board Member, UK Government Investments (UKGI)
	Tim Franklin	Non-Executive Board Member (to 31 January 2018)
	Catrina Holme	Non-Executive Board Member (to 7 July 2017)
	Gerard Connell	Non-Executive Board Member (to 29 August 2017)
	Graham Farrant	Chief Executive and Chief Land Registrar
	Catherine Vaughan	Director of Finance and Business Services (to 3 September 2017)
	Ruth Curry	Acting Director of Finance and Business Services (from 1 September 2017)
	John Peaden	Director of Operations (to 30 June 2017)
	Chris Pope	Chief Operations Officer (from 25 October 2017)
Attendees
	Mike Westcott Rudd	Board Legal Adviser
	Mike Harlow	General Counsel and Deputy Chief Land Registrar (from 1 February 2018)

Executive Board

The Executive Board (EXB) is chaired by the Chief Executive and Chief Land Registrar and its members are HM Land Registry’s executive directors. The EXB is responsible for the delivery of HM Land Registry’s Annual Management Plan and for the day-to-day operational management of the organisation. The EXB met 12 times in 2017/18.

Executive Board membership
	Graham Farrant (Chair)	Chief Executive and Chief Land Registrar
	John Abbott	Director of Digital, Data and Technology
	Caroline Anderson	Director of Human Resources and Organisation Development
	Catherine Vaughan	Director of Finance and Business Services (to 3 September 2017)
	Ruth Curry	Acting Director of Finance and Business Services (from 1 September 2017)
	Alasdair Lewis	Director of Legal Services and Deputy Chief Land Registrar (to 31 October 2017)
	Mike Harlow	General Counsel and Deputy Chief Land Registrar (from 1 February 2018)
	John Peaden	Director of Operations (to 30 June 2017)
	Chris Pope	Chief Operations Officer (from 25 October 2017)
	Karina Singh	Director of Transformation (from 1 November 2017)
	Mike Westcott Rudd	Board Legal Adviser
Attendees
	Cathy Jenkins	Chief of Staff (from 24 July 2017)
	Nicky Heathcote	Head of the Chief Land Registrar’s Office (to 30 June 2017)

Audit Committee

The committee supports the LRB and the Accounting Officer by seeking assurance on the risk management framework, the control framework, governance and compliance with policies, procedures and external standards and statutory requirements.

Audit Committee membership
	Chris Morson (Interim Chair from 10 March 2018)	Non-Executive Board Member (from 8 January 2018)
	Tony Buffin (Chair from 31 January 2018 to 10 March 2018)	Non-Executive Board Member (from 8 January 2018 to 31 March 2018)
	Tim Franklin (Chair to 31 January 2018)	Non-Executive Board Member (to 31 January 2018)
	Angela Morrison	Non-Executive Board Member (from 20 March 2018)
	Gerard Connell	Non-Executive Board Member (to 29 August 2017)
	Derrick Palmer	Independent member of the Audit Committee
Attendees
	Graham Farrant	Chief Executive and Chief Land Registrar
	Catherine Vaughan	Director of Finance and Business Services (to 3 September 2017)
	Ruth Curry	Acting Director of Finance and Business Services (from 1 September 2017)
	Brian Anderson	Risk Manager
	Grahame Hughes	Head of Internal Audit (to 30 June 2017)
	Stuart Brown	Internal Audit
	Darren Hall	Head of Internal Audit, Government Internal Audit Agency (from 1 July 2017)
	Mike Westcott Rudd	Board Legal Adviser
	Representative of National Audit Office	National Audit Office
	Representative of UKGI	UKGI

Remuneration and Nomination Committee

The committee agrees pay strategy and authorises the annual pay review for HM Land Registry Senior Civil Service staff and agrees a strategy for succession to the LRB and EXB.

Remuneration and Nomination Committee membership
	Gerard Connell	Non-Executive Board Member (to 29 August 2017)
	Graham Farrant	Chief Executive and Chief Land Registrar
	Tim Franklin (Chair from 8 November 2017 to 8 January 2018)	Non-Executive Board Member (to 31 January 2018)
	Catrina Holme (Chair to 8 November 2017)	Non-Executive Board Member (to 7 July 2017)
	Diana Breeze (Chair from 8 January 2018)	Non-Executive Board Member (from 8 January 2018)
	Chris Morson	Non-Executive Board Member (from 8 January 2018)
Attendees
	Caroline Anderson	Director of Human Resources and Organisation Development

Register of interests

A register of interests is maintained at HM Land Registry Head Office. See note 21 to the accounts for related party disclosures.

Personal data-related incidents

There were no personal data-related incidents reported to the Information Commissioner’s Office during the year.

Other accountabilities

Health and safety

We have continued to develop the health and safety management system we have in place to ensure compliance with legislative and regulatory requirements, monitor the adequacy of health and safety policies and promote continual improvement.

The system has enabled us to maintain a good standard of compliance despite our facilities management provider, who delivered health and safety services on our behalf, going into administration in January.

There has been a focus on awareness and improvement in display screen equipment assessment processes this year, with a complete review undertaken and a programme of training for internal assessors implemented to promote best practice and support our commitment to preventative health and safety strategies. We have continued to develop our material, online training and awareness campaigns on road safety to further reduce the risk for our drivers.

The total number of accidents reported by HM Land Registry staff at work was 168, none of which were required to be reported to the Health and Safety Executive under the Reporting of Injuries Diseases and Dangerous Occurrences Regulations.

We were successfully recertified to OHSAS18001, the British Standard for health and safety management, following a full recertification audit by external assessors. The audit is wide-ranging, covering all aspects of health and safety, and is undertaken every three years as part of the accreditation process, followed up by six-monthly surveillance audits. The recertification provides further assurance of the maturity of our health and safety management system and demonstrates continual improvement and alignment with best practice.

Service standards

Details of the service that customers can expect from us.

Welsh language service

Information about our Welsh language service.

Complaints

We recorded 2,712 complaints in 2017/18 compared with 2,464 in 2016/17.

This increase is partly accounted for by greater consistency in the recognition and recording of customer feedback. Because of feedback from our Independent Complaints Reviewer about issues with consistency in the recognition and handling of some complaints, we carried out new training for key staff at all our offices. Work to make further improvements will continue in 2018/19.

An increase in cancellations and application enquiries from incomplete or incorrect applications has also resulted in more complaints relating to our decisions to cancel, raise enquiries and the speed, clarity and reliability of our communications in these areas.

The overall proportion of upheld complaints was 42% out of 2,712. Customer feedback about the cancellation of registration applications was the most common area of upheld complaint, comprising 21% of the upheld total. As a result of this feedback, reminders have been issued about how cancellations should be handled and in 2018/19 more work will be done to develop systems aimed at standardising our approach.

The use of our Customer Relationship Management software for complaint recording, reporting and insight/analysis has created further opportunities to learn from and act on customer feedback and improve our overall service. Examples of this included enhancements to our:

• Business e-services to allow users who submit registration applications electronically to choose an individual or collective email address for managing the receipt of correspondence from us, for example, our enquiries and cancellation letters. This minimises the manual inputting of contact information by the customer and HM Land Registry, helping to ensure that our correspondence reaches the appropriate address;

• guidance for staff and customers has been improved to make our requirements clearer on commonly submitted registration applications, helping to avoid the need for us to raise an enquiry and improving our consistency when enquiries are required;

• service giving customers improved information and functionality to track the progress and status of registration applications pending with us and to contact us electronically about them, if needed;

• Business e-services to further increase the number of application results, notifications and documentation received and delivered electronically; and

• range of standard wording used when we raise an enquiry on registration applications which are not in order, improving the quality and consistency of the information provided to customers.

Security incidents

Physical security is overseen by the Physical and Personnel Security Panel. There were 50 incidents during the year including four significant (Class 1) incidents.

Statement of Accounting Officer’s responsibilities

Under Section 4(6) of the Government Trading Funds Act 1973 HM Treasury has directed HM Land Registry to prepare for each financial year a statement of accounts in the form and on the basis set out in the Accounts Direction referred to in note 1.1. The accounts are prepared on an accruals basis and must give a

true and fair view of the state of affairs of HM Land Registry and of its income and expenditure, changes in reserves and cash flows for the financial year.

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

• observe the Accounts Direction issued by HM Treasury, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis;

• make judgements and estimates on a reasonable basis;

• state whether applicable accounting standards as set out in the Government Financial Reporting Manual have been followed and disclose and explain any material departures in the accounts; and

• prepare the accounts on a going concern basis when appropriate to do so.

HM Treasury has appointed the Chief Executive of HM Land Registry as the Accounting Officer for the trading fund. 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 HM Land Registry’s assets, are set out in the Accounting Officers’ Memorandum issued by HM Treasury and published in Managing Public Money.

So far as I am aware there is no relevant audit information of which the auditor is unaware, and the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

As Accounting Officer I confirm that the annual report and accounts as a whole is a fair, balanced and understandable account of HM Land Registry’s operational and financial performance and I take personal responsibility for the annual report and accounts and the judgements required for determining that it is fair, balanced and understandable.

Governance statement

Scope of responsibility

As the Accounting Officer for HM Land Registry I have responsibility, advised by the Board of Land Registry (LRB), for maintaining corporate governance structures that support the achievement of HM Land Registry’s aims, objectives and targets while safeguarding public funds and HM Land Registry’s assets.

HM Land Registry is a non-ministerial government department, a trading fund and an executive agency. Ministerial oversight is provided by the Department for Business, Energy and Industrial Strategy (BEIS). My duties as Accounting Officer are set out in Managing Public Money. I am accountable for performance and stewardship, guided by the LRB, to the Secretary for State for BEIS with day-to-day responsibility delegated to the Parliamentary Under Secretary of State.

The main duties relating to maintaining the register of title to freehold and leasehold land and mortgages are defined in the Land Registration Act 2002 and those relating to Land Charges and Agricultural Credits are defined in the Land Charges Act 1975 and the Agricultural Credits Act 1928 (see the Performance report overview).

The Infrastructure Act 2015 widened the scope of HM Land Registry’s powers enabling us to build on the property services we already provide. The legislation provides that HM Land Registry will become the registering authority for the statutory Local Land Charges Register in place of individual local authorities and will hold those records in a single digital register. Private beta testing has commenced and will continue over the next three to six months where we will work closely with the first phase of local authorities to transfer the service. This will provide us with invaluable data about migrating local authority data to our new digital Local Land Charges Register and how local authorities will maintain the register once their data has been migrated.

Purpose of the governance framework

The governance framework is designed to give assurance that HM Land Registry carries out its duties in a manner that fulfils the appropriate standards of effective internal control and risk management. It is based on processes designed to identify and prioritise the opportunities and risks to the delivery of HM Land Registry’s strategy, the strategic objectives and performance targets. The governance framework is designed to help the organisation achieve its objectives.

The governance framework is also designed to align with the strategic aims of BEIS and our statutory duties as set out in our Framework Document 2012. This document is being revised to reflect HM Land Registry’s role changes and to take account of the views of stakeholders. This framework has been in place throughout 2017/18 and up to the date of approval of the accounts. In all important respects, the framework already complies with the new Partnerships between departments and arm’s-length bodies: Code of Good Practice 2017. It remains fully compliant with the code published by HM Treasury and the Cabinet Office, Corporate governance in central government departments: Code of good practice 2011. The new Framework Document will comply with the new Partnerships between departments and arm’s-length bodies: Code of Good Practice 2017.

Key elements of the governance framework

The governance framework includes:

• HM Treasury letter appointing the Accounting Officer;

• Framework Document 2012 (currently under review);

• LRB terms of reference, agendas and minutes;

• Audit Committee terms of reference, agendas and minutes;

• Remuneration and Nomination Committee terms of reference, agendas and minutes;

• EXB member-led committees, terms of reference, agendas and minutes;

• ministerial endorsement of the direction of travel articulated in the Business Strategy;

• delegations of budget;

• non-financial delegation letters to members of the EXB;

• delegations of financial authorities designed to reflect the external framework set and revised by the Cabinet Office, BEIS and UK Government Investments (UKGI); and

• LRB and EXB member-led committees.

An ambitious Business Strategy 2017-2022 was launched on 29 November 2017 and sets out five-year objectives which take account of the Government’s commitments for HM Land Registry to transform in the public sector and to identify the public holding of land that could be used for housing which is referred to in the Housing White Paper Fixing our broken housing market.

This new strategy brings together six different dimensions to provide a comprehensive guide to how we will achieve our ambition to be the world’s leading land registry. They are: Brilliant at the Basics; Comprehensive Register; Digital Street; Opening our Data; Expert People; Financially Strong. They all challenge HM Land Registry to contribute effectively to improving the conveyancing process and the availability of housing alongside other Government policy initiatives.

We agreed 11 key performance indicators with the Minister and BEIS for 2017/18 and have met our targets in all but one area relating to the speed of service for dealing with complex registration cases where a new title is created. While good progress has been made during 2017/18 on reducing the average age of cases to 24.9 days, we did fall short of the challenging target set on eliminating delays on the more complex applications received. However other casework related targets, including the speed of service targets for our information services and register update services, were met; the quality target for processing of substantive applications, unit cost, the availability of external services, and customer satisfaction ratings, were all achieved. We have completed a list of the unregistered public estate, an important part of our work to assist with Government housing commitments, and produced workable prototypes for the ‘Digital Street’. A strategy to reduce requisition rates has also been agreed.

We are continuing to make significant inroads into our backlog of complex registration work. Our caseworkers process around 20,000 applications to change the Land Register each day with 18,000 being mostly ‘straightforward updates’ (such as transfers of ownership) and 2,000 being more complex register creation processes such as first registrations, new leases and splitting titles. In addition, we process 100,000 register query requests and searches every day, many of which are already automated.

Colleague engagement has improved with a 4% increase to 60% in this year’s annual Civil Service People Survey. This has been achieved by embedding more frequent office visits by EXB members, weekly blogs and more active engagement with the departmental trade unions and the Leadership Group. Other encouraging figures showed that colleagues felt the Board had a clear vision for the future (up 18% to 52%) and that senior managers demonstrate our core values (up 13% to 46%). However, there is still work to be done, as although our overall leadership score was up 8% to 41% it is not where I want it to be or where any organisation like ours should aspire to be, which is why we have set even more stretching targets over the next four years.

Land Registry Board

The refreshed LRB continues to recognise the importance of leadership to create an environment where performance and risk are managed effectively.

Membership of LRB changed significantly during the year, largely due to the natural expiration of terms of appointment. LRB currently consists of a Non-Executive Chair, Michael Mire, seven other non-executive members, including a representative from UKGI, and three EXB members, being myself as Chief Executive and Chief Land Registrar, the Acting Director of Finance and Business Services and the Chief Operations Officer. The Board Legal Adviser also attends the meetings and acts as secretary to the Board.

Catrina Holme’s appointment ended on 7 July 2017 and Gerard Connell’s appointment ended on 28 August 2017. Tim Franklin, the Senior Independent Director, left the organisation on 31 January 2018. Kirsty Cooper has replaced him as Senior Independent Board Member and was joined on the Board by Tony Buffin (who resigned with effect from 31 March 2018), Chris Morson and Diana Breeze. Those four appointments took effect on 8 January 2018. Doug Gurr joined on 9 February 2018 and Angela Morrison on 20 March 2018. LRB members have been appointed to bring the range of skills and experience needed to help HM Land Registry to deliver.

The LRB’s main role is to support, advise, constructively challenge and provide guidance to the Chief Executive and the EXB. It should also ensure that HM Land Registry is working within a framework of prudent and effective governance arrangements and controls which enable risk to be appropriately assessed and managed. As part of that function, the LRB should agree the key activities that HM Land Registry will need to undertake to meet the strategic objectives (set out in the Annual Plan published on GOV.UK), support the Chief Executive in ensuring the necessary financial and human resources are in place for it to meet these objectives, and regularly review performance in relation to agreed targets and delivery of the approved Annual Plan.

The LRB should also formulate HM Land Registry’s vision and values and ensure its obligations to BEIS, as its sponsor department, and all its stakeholders (including customers, employees and other government departments) are understood and met.

The non-executive members are independent of management. There were no examples of company appointments or consultancy arrangements held by them that could give rise to a potential conflict of interest with their responsibilities as members of the LRB.

Land Registry Board purpose

In line with Cabinet Office guidance the LRB is tasked with advising on, and supervising, five main areas.

• Strategic clarity.

• Commercial sense.

• Talented people.

• Results focus.

• Management information.

During 2017/18 the LRB evaluated and agreed:

• the plans for backlog reduction;

• the plans for comprehensive registration;

• progress against the Transformation Programme;

• formal change programmes including Local Land Charges;

• the Programme Business Case for digital mortgage;

• the strategic approach to other digital innovations;

• the revised Local Land Charges Business Case;

• the development of an initial view of the Digital Street concept; and

• the approach to test out new ideas within a model office.

In this financial year, LRB also agreed:

• the Business Strategy 2017-2022;

• the approach to major strategic issues affecting the delivery of the Business Strategy; and

• the approach to the revision of land registration fees.

Committees of the LRB

Audit Committee

The Audit Committee supports the LRB and the Accounting Officer by seeking assurances through information and reports over:

• the strategic framework and process for risk management, control and governance and this governance statement;

• the accounting policies, the accounts and the annual report of the organisation, including levels of error identified, and management’s letter of representation to the external auditors;

• the risk-based planned activity and results of both Internal Audit and External Audit;

• assurances relating to corporate governance requirements for the organisation:

  • assurance that value for money principles were being adopted in procurement processes and validated against in-house options when appropriate;

  • counter-fraud policies, whistleblowing processes and the arrangements for special investigations; and

  • cyber-security measures and actions arising from external and internal assessment exercises; and

• ongoing compliance with the International Standards for the Professional Practice of Internal Auditing and the Public Sector Internal Audit Standards (PSIAS).

Membership of the Audit Committee comprised Tim Franklin, non-executive member as Chair until his departure in January 2018, when he was replaced by Tony Buffin until March 2018 and then on an interim basis by Chris Morson. Non-executive members Gerard Connell (until 29 August 2017), Angela Morrison (from 20 March 2018) and Derrick Palmer (Independent Member of the Audit Committee) also attended. The Acting Director of Finance and Business Services, Ruth Curry, the Board Legal Adviser and I also attend these meetings. The Head of Internal Audit is also present and other officers attend as necessary to support the committee’s programme and agenda.

Remuneration and Nomination Committee

The Remuneration and Nomination Committee ensures that remuneration and nomination arrangements, including senior pay strategy, support HM Land Registry aims and enable the recruitment, retention and performance of the executive team. At the start of the year, Catrina Holme chaired the Remuneration Committee. Following her departure, Tim Franklin was appointed as Chair of this Committee temporarily from 8 November 2017 to 8 January 2018 in order to endorse the senior pay strategy. Membership of the Remuneration Committee now comprises myself and two non-executives, Diana Breeze (Chair) and Chris Morson, advised by Director of Human Resources and Organisation Development Caroline Anderson. It has met three times during the financial year.

Executive Board

The EXB assists me to lead and manage HM Land Registry to ensure the delivery of the objectives and business targets, the successful implementation of an approved Business Strategy, annual plans and compliance with the Framework Document.

Through the mechanism of individual letters of delegation, members of the EXB handle the day- to-day running of HM Land Registry, including:

• monitoring KPIs and overall budget;

• managing risks to the organisation;

• taking financial decisions;

• managing and controlling the trading fund;

• dealing with customer issues; and

• escalating important issues to the LRB for review.

I continue to use a Leadership Group, drawn from the first-tier managers below EXB level, to help formulate and take forward some of the ideas and detail for policy and strategy around land registration and its associated activities and to support the change programmes. I have also held meetings with the Strategic Leaders Network, which comprised of almost 100 middle and senior managers, several times this year to enable their participation in strategic decisions and better communication of strategic initiatives throughout the organisation.

Transformation Board

The Transformation Board is chaired by me and made up of the EXB directors, with representatives from Corporate Communications and our project management teams. During the year the board has prioritised resource allocation to critical change. It has also improved controls over resource planning and allocation by integrated financial and clearer governance around change activities. The introduction of a prioritisation model has helped the Transformation Board confirm the change priorities against the organisation’s strategic aims. Project, programme and portfolio reporting has been further enhanced to provide better analysis of the impact of changes and highlight key issues and emerging risks. An Assurance Strategy continues to provide a framework for assurance across the portfolio. All Transformation Board risks are now held on the Corporate Risk Register. The Transformation Board has benefited from the appointment of new board members who have brought their knowledge and experience, which has provided greater challenge and assurance.

Towards the end of this financial year the Transformation Board approved, using external support, to help the organisation set up a new governance structure to support delivery of the Business Strategy through the creation of fewer programmes clearly linked to the strategy and with clearer accountability at director level.

Commercial Governance Panel

The Commercial Governance Panel is chaired by the Acting Director of Finance and Business Services and includes the Head of Commercial Group, the Head of Strategic Finance and a corporate lawyer. It provides an additional layer of internal governance for expenditure on external goods and services over £100,000. The panel supports HM Land Registry’s delegations of authority, providing assurance to the Director of Finance and Business Services and the Accounting Officer for all spending falling within their expenditure limits, overseeing significant contract awards and contract extensions and other changes. It ensures all expenditure is aligned to HM Land Registry’s Business Strategy and the proposed procurement route will deliver the best value for money and is compliant with public procurement legislation and Cabinet Office controls.

The success of this body is that it has brought clarity to the procurement process, ensuring a range of options have been considered and an appropriate strategy has been agreed before the procurement commences. The need for panel approval has increased early collaboration between stakeholders and the commercial team, to ensure proposals put to the panel can be approved on first submission. However, I am still dissatisfied with certain aspects of the procurement process as HM Land Registry has been let down by contracts on a major project known as ‘Fusion’ during 2017/18.

Committee structures revised

The committees of the EXB are supported by a range of panels which are chaired by senior managers. An annual review of internal governance undertaken in the final quarter of this year has confirmed the effective working of the current structure and the committees and panels within that structure. Changes to membership and terms of reference of some committees and panels have been required during the course of the year to reflect the changes in the wider organisation and continue to provide robust oversight and assurance. For several of them, this originated from the process made with the work on the Local Land Charges Register, which is moving towards business as usual rather than change activity.

The Cyber Panel has become formally embedded within the organisation, supporting the work of the Information Management Committee, to oversee our education and training activities as well as cyber security improvements. It is also supporting the steps we need to take to strengthen our own and wider government cyber, physical and people security through the Transforming Security in Government agenda. A Digital Panel has recently been created to ensure we look holistically at how we approach the application of electronic signatures to documents within the conveyancing process, looking at our potential status as a trusted provider and the role we would play for other parts of government in that space. A Public Appointments team has also been set up to look more holistically at our senior appointments. A Data Panel considers the terms and conditions on licensing our data and the form in which our data can be produced.

Business Strategy

The Chancellor’s 2016 Autumn Statement confirmed that HM Land Registry would focus on becoming a data-driven registration organisation in the public sector. This direction has been embedded into the organisation since then and our new Business Strategy 2017-2022 was formally launched by our Minister on 29 November 2017. It sets out the programme of work towards innovation and transformation and looks forward to a digital future. We are seizing the opportunities provided by this ambition and our public sector status to set out a strategy that reaches throughout the organisation to transform and modernise the services we provide and how we provide them.

This Business Strategy explains how land registration applications, register queries and other services will become quicker and simpler by digitising and updating them. It sets out how we will give our colleagues better systems, modern working environments and improved development opportunities. It explains how we will publish more of our data and explore opportunities to extract more value from it through innovation and by working creatively with other organisations.

The strategy is based on the rationale that any transformation should only be about change for the better, with strategic risks managed, clear governance, financial controls in place and core service standards maintained or improved at all times.

Attendance schedule for LRB, Audit Committee and Remuneration Committee

Non-executive	Title	Period (appointment relates to whole of the reporting year unless otherwise specified)	Board	Committee
			LRB	Audit	Remuneration
Diana Breeze	Non-Executive Member	Appointment commenced 8.1.18	3/3	–	1/1
Tony Buffin	Non-Executive Member	Appointment commenced 8.1.18 and ended 31.3.18	2/3	0/0	–
Gerard Connell	Non-Executive Member	Appointment ended 28.8.17	3/3	1/1	1/1
Kirsty Cooper	Non-Executive Member	Appointment commenced 8.1.18	3/3	–	–
Tim Franklin	Non-Executive Member (and Senior Independent Director)	Appointment ended 31.1.18	6/6	2/3	1/1
Catrina Holme	Non-Executive Member	Appointment ended 7.7.17	1/2	–	1/1
Michael Mire	Non-Executive Chair		8/8	–	–
Chris Morson	Non-Executive Member	Appointment commenced 8.1.18	3/3	0/0	1/1
Derrick Palmer	Non-Executive Member (Audit Committee)		–	3/3	–
Claire Wren	Non-Executive Member UK Government Investments		7/8 (see footnote 1)	–	–
Angela Morrison	Non-Executive Member	Appointment commenced 20.3.18	1/1	0/0	–
Doug Gurr	Non-Executive Member	Appointment commenced 9.2.18	1/1	–	–
Executive
Ruth Curry	Acting Director of Finance and Business Services	In position since 1.9.17	5/5	2/2	–
Graham Farrant	Chief Executive and Chief Land Registrar		8/8	3/3	3/3
Mike Harlow	General Counsel and Deputy Chief Land Registrar	Appointment commenced 1.2.18	2/2	–	–
John Peaden	Director of Operations	Appointment ended 30.6.17	1/1	–	–
Chris Pope	Chief Operations Officer	Appointment commenced 25.10.17	4/4	–	–
Catherine Vaughan	Director of Finance and Business Services	Appointment ended 3.9.17	3/3	1/1	–
Caroline Anderson	Director of Human Resources and Organisation Development		–	–	2/3
Mike Westcott Rudd (see footnote 2)	Board Legal Adviser		8/8	3/3	–

1. UK Government Investments was represented at the February meeting by Ceri Smith in place of Claire Wren.
2. Mike Westcott Rudd attends as Legal Adviser to the Board.

Local Land Charges – statement on governance

The Infrastructure Act 2015 provides the basis on which HM Land Registry can become the registering authority and hold the statutory Local Land Charges Register in place of local authorities. Twenty-six have been identified to participate in our approved Phase 1 approach. I am satisfied that the governance and risk management arrangements for the programme are appropriate and proportionate. I base this conclusion on the Infrastructure and Project Authority’s (IPA) (formerly the Major Project Authority) reports which gave the programme an amber Delivery Confidence Assessment rating in November 2016 and made 11 recommendations to assist HM Land Registry with preparing for actual delivery. HM Land Registry has addressed those recommendations and received assurance from across government in January 2017, including the Ministry for Housing, Communities and Local Government (MHCLG), HM Treasury (HMT) and the IPA, that our Phase 1 approach is appropriate.

I also receive progress reports and assurances from the programme senior responsible owner. This involves monthly reporting to the Local Land Charges Programme Board and complete review of all risks, including the associated strategic risk, on a quarterly basis. Risks are also reported to BEIS on a monthly basis, including presenting an update to their Performance, Finance and Risk Committee.

Information about quality of data

A Performance Panel of senior managers meets monthly to review, in detail, the performance and management information available to managers. The summary outputs of these discussions are then reported to EXB monthly and LRB quarterly. We have continuously improved our management information this year, introducing a more streamlined weekly pack of operational data for EXB and consolidating financial, performance and operational data within our Monthly Management Information Pack.

Financial performance is monitored and reported using monthly reports based on our financial system. We provide monthly “snapshot figures” reports which provide early sight of the month-end position in advance of the full monthly financial reports.

There is a procedure for setting annual budgets and reviewing financial performance and full-year forecasts. Quarterly forecast reviews are in operation giving the EXB and LRB appropriate oversight and assurance and monthly updates are provided via the Chief Executive’s monthly report to the LRB.

HM Land Registry operates a number of models critical to its core business. These include models to forecast intakes and fee income; an operational forecast model for workload, resources and backlog; models to support standard management and financial reporting. These models are subject to challenge and forecasts and are reported monthly to EXB and quarterly to LRB. We have specific financial models for our major programmes, including both the Digital Programme and Local Land Charges, which are used to inform the business cases for these programmes and to provide detailed financial planning.

During the year we have embedded an Operational Forecasting Model for establishment control intended to improve planning for the allocation of resources to workload and better evaluation of resource requirement linked to our forecast intakes and people budgets and made significant improvements within it to improve the accuracy of our forecasting. One of the main benefits of this has been a more granular understanding of why variances to our central forecast occur.

Whistleblowing – statement of arrangements and results

The sponsoring EXB member is the General Counsel and Deputy Chief Land Registrar. No new whistleblowing cases were reported in year. During 2017/18 the whistleblowing process was the subject of an Internal Audit report and the recommendations from that audit have been fully implemented. The audit found that although the whistleblowing policy and procedure is compliant with government policy and best practice, more was required to ensure staff and line managers were aware of the policy and actions have now been taken to ensure this.

Risk

Framework for risk management

In 2017 HM Land Registry introduced a new Risk Management policy based on the principles of the Management of Risk publication by HM Treasury (The Orange Book) and the Cabinet Office’s framework model for risk management: Management of risk in government. The policy embeds the principles and guidelines on risk management as contained in ISO31000 and sets out the framework for managing risk as business as usual. It also establishes an Enterprise Risk Management approach to managing risk within HM Land Registry.

These principles are designed to protect our ability to achieve our organisational objectives. These range from the formal objectives set out in our Business Strategy, our Annual Plan and directorate annual plans, right down to the delivery of business as usual, and includes our change programme.

We also adopt the three lines of defence approach to identifying and managing risk. This ensures our managers (1st line) are supported in identifying and managing risks by the Risk Management function (2nd line) with Internal Audit (3rd line) providing independent and objective assurance on the effectiveness of the risk management arrangements.

The LRB, EXB and Audit Committee all consider strategic risks. The LRB Legal Adviser acts as the EXB’s risk champion. The strategic risks are reviewed quarterly and key changes flagged to the EXB; in addition a more thorough risk review is completed each quarter facilitated by the Risk Manager. Lead indicators are monitored to provide early warning of changes in strategic risk which are then acted upon.

Key strategic and programme risks

All of our strategic risks have been reviewed in line with the Enterprise Risk Management approach and aligned to the strategic objectives contained in the Business Strategy. There are currently 14 strategic risks with all directors owning at least one. Aligning the strategic risks to the strategic objectives ensures the emphasis is focused on achieving our ambitions as set out in the Business Strategy. There is one strategic risk that has a RAG (red/amber/green) status of “red”. This is the Fusion Project, which merges two of our key systems into one fully integrated Enterprise Resource Planning system. It has moved to red as the initial target date of May 2018 will be missed. However it is on track for completion during the next financial year.

Framework for control and risk management

The use of the single risk register across all directorates, except our Digital, Data and Technology Directorate who hold their own register, enables improved monitoring of the managing of risks across the organisation. We are in the process of procuring a new system where all directorates will be on the same system. Strategic risks are reviewed and considered quarterly by the EXB and reported quarterly to the Audit Committee.

All senior managers, and those who potentially may be responsible for identifying and managing risk, have received risk management training provided by the Risk Management Team with remaining colleagues receiving risk management awareness training via an e-learning package.

Information and cyber risk

Information risk is managed through the Information Management Committee led by the Senior Information Risk Owner (SIRO) and Board Legal Adviser. The SIRO is assured by information risk returns carried out by our Information Asset Owners (IAOs) and fully documented asset descriptions. Our Digital, Data and Technology Risk Management Process and Policy have been independently audited, validated and accredited through CMMI, ISO20000 and ISO27001 and the Cabinet Office Cyber Defence Capability Assessment Tool (CDCAT).

Protecting information

All staff are required to complete the appropriate levels of information management training and undertake an online training activity every year. This year we created our own online training module so that staff could learn about our particular concerns about the cyber threats we face and their role in protecting against them. This was launched on 6 November 2017 as part of a Cyber Security Awareness Campaign on which we will build over the rest of 2018.

We are continuing to work within the ISO27001 framework, the international standard for information security management, which we have done now for almost 14 years. The standard works on a three-yearly recertification cycle and we are due to be recertified in 2020.

The standard is comprehensive and includes IT security, physical security, information management, business continuity and risk management.

Response to Alexander Review and guidance for off- payroll contractors and revised recruitment processes

HM Land Registry continues to proactively monitor the systems and procedures relating to off-payroll contractors to comply with changing requirements to provide assurance that all contractors engaged by HM Land Registry are complying with appropriate tax and NIC regulations. I am assured that our processes assume all off-payroll staff are subject to IR35.

The majority of our off-payroll staff are employed through the Capita CL1 framework, and a requirement within this framework is that staff are employees of the introducing agency with tax/ NI deducted at source. For those coming to us through another route, we ensure in advance that they understand the IR35 requirements and the need to demonstrate compliance – this is normally provided by way of a copy of their first payslip.

Human Resources leads on this process, checking with the Director of Finance and Business Services that the evidence provided is sufficient to show compliance and seeking support where required in using the HMRC tool.

Working with the Macpherson Review on Quality Assurance of Government Models

This forms part of our annual review of Managing Public Money which falls under the remit of our Audit Committee. Last year they identified that all business critical models should have a Senior Responsible Owner. We have strengthened controls in this area with the appointment of a Deputy Director of Strategic Planning and Performance, whose responsibilities include ensuring appropriate assurance of business critical models, including that the recommendations of the Macpherson Review are appropriately implemented. A modelling framework has been developed which sets out the level of assurance required dependent on the criticality of the model in decision making.

Action taken to improve service speeds

To meet growing demands, evening and weekend overtime has been offered to staff and 411 frontline staff have been recruited. In addition, 163 fixed-term appointments (recruited in 2016/17) were converted to permanent staff (with another eight due to be considered before the end of the year), and 140 apprentices were taken on (60 in May and 80 in July in tranches 3 and 4 of our ongoing commitment to apprenticeship schemes). Tranche 3 apprentices are currently being considered for permanent positions while Tranche 4 apprentices will follow a similar process early in the new financial year.

Early Retirement Provision

Through the unwinding of the Early Retirement Provision in respect of colleagues who left HM Land Registry some years ago, it came to light that there is a possibility HM Land Registry had made overpayments to myCSP, who administer the Principal Civil Service Pension Scheme on behalf of Cabinet Office, in 2016/17 and 2017/18. Tighter controls have been introduced to ensure any potential overpayment is captured early and in advance of automatic direct debits being taken, enabling these payments to be challenged and stopped. More information can be found in the Financial Statements in Note 19.2.

Litigation (tribunal cases)

There have been no cases in 2017/18.

Sources of assurance

Infrastructure and Project Authority

The Local Land Charges Programme is a significant programme subject to review by the Government’s Infrastructure and Project Authority (IPA). The first draft of the programme business case is under consideration.

In November 2016, the IPA undertook a Gateway 0 Review resulting in an amber Delivery Confidence Assessment (DCA). This built on the ’Assurance of Action’ Review undertaken in January 2016 which also gave an amber DCA, improving on the red/ amber assessment given in August 2015 as we move forward with the development of our plans.

Cyber defence

Building on the significant improvements made during the previous financial year, HM Land Registry completed its Cyber Security Project in June 2017 with an externally assessed level 4 achievement in CDCAT. Our cyber maturity level was assessed at level 5 in all but one of the areas tested in respect of the critical national infrastructure data we hold. That data comprises the Land Register, the Bankruptcy and Land Charges registers and the Agricultural Credits Act registers but not yet the register of Local Land Charges.

The Cyber Panel, accountable to the Information Management Committee, has taken over responsibility for the holistic oversight of our continuing improvement initiatives and the steps we need to take to maintain our cyber security maturity levels as we pursue our ambitious programme of work to digitise our services and products. The Cyber Panel now oversees our plans to improve our understanding of cyber threats within all levels of our procedures, processes and across our work through our permanent and temporary staff, contractors, suppliers and partners so we can ensure account is taken of the cyber threat landscape across all levels and types of decision-making. This includes investment in tailored cyber training and education programmes in addition to the use of central government guidance, educational resources and networks and further internal CDCAT and other assessment activities.

HM Land Registry officials are already taking an active role within the Transforming Security in Government Programme to strengthen our adoption of best practice in cyber defences and establish strong communications networks with the National Cyber Security Centre and the growing specialist security community within government. This will help us review the effectiveness of current measures such as CDCAT and ensure the suite of activities, which include ISO27000 and ISO27001, meets our evolving needs.

Central controls

My role as Chief Executive and Chief Land Registrar is to carry out the role of Chief Land Registrar referred to in the Land Registration Act 2002, the Land Charges Act 1972 and the Agricultural Credits Act 1928 and the Local Land Charges Act 1975 as amended by the Infrastructure Act 2015. The Chief Executive is responsible for keeping the registers established for the purposes of those Acts and has all the powers, responsibilities and duties conferred and imposed on the Registrar by those Acts and by the rules and other secondary legislation made under them. In carrying out those specific operational functions the Chief Executive is not subject to any ministerial control or direction, although is subject to supervision by the court through the judicial review jurisdiction.

Notwithstanding that contextual framework, HM Land Registry also operates within the delegations framework as defined by the Cabinet Office for arm’s- length bodies and the specific delegations authorised by officials at BEIS. There is also a requirement to work with the Government Digital Service to ensure that product releases conform to standards in terms of security, effectiveness and consistency. Before products are released as betas, HM Land Registry must submit products and comply with the conditions specified by the Government Digital Service.

Financial management reporting

I am informed on HM Land Registry performance through the monthly financial reports from the Director of Finance and Business Services, which includes analysis of forecast workload intakes and the likely impact on revenues needed to finance the operational activities. During the year the Director of Finance and Business Services has continued to lead the response to the CIPFA Financial Management Model report, leading to enhancements in the quality of management reporting, enhanced support and ensuring the skills within the directorate are more appropriate to the demands of the organisation.

Procurement assurance

I am assured by the Acting Director of Finance and Business Services, regarding specific procurements, that procurement activities are conducted in line with Cabinet Office and HM Treasury guidance and that senior managers have complied with these and HM Land Registry-specific procurement guidelines.

Performance reporting

In addition to the monthly financial reports from the Director of Finance and Business Services I receive information on operational performance through a performance hub, which is compiled from wider performance data received and reviewed by the Performance Panel before its submission monthly to the EXB. I also receive update papers and presentations from management teams to me and my EXB.

I regularly visit the operational offices and Head Office groups, as do all the other members of the EXB, and we receive feedback on organisational performance and other issues of concern to our staff from colleagues at all levels of the organisation.

The operational visits provide vital feedback on the backlog position and speed of service outcomes. I also meet with a range of external stakeholders through planned visits, regular meetings and formal stakeholder engagement groups to understand their concerns and operational context.

Internal Audit and opinion

The annual opinion of the Head of Internal Audit is: “Based on the work completed by Internal Audit during 2017/18, I am able to provide moderate assurance that the HM Land Registry framework of risk, control and governance has enabled the satisfactory achievement of its business objectives, and that key risks are generally being effectively managed”.

Graham Farrant
Accounting Officer
Chief Executive and Chief Land Registrar
29 June 2018

Remuneration and staff report

Policy for senior civil servants

The remuneration of senior civil servants (SCS) is set by the Prime Minister following independent advice from the Senior Salaries Review Body.

In reaching its recommendations, the Review Body has regard to:

• the need to recruit, retain and motivate suitably able and qualified people to exercise their different responsibilities;
• regional/local variations in labour markets and their effects on the recruitment and retention of staff;
• Government policies for improving the public services including the requirement on departments to meet the output targets for the delivery of departmental services;
• the funds available to departments as set out in the Government’s departmental expenditure limits; and
• the Government’s inflation target.

The Review Body takes account of the evidence it receives about wider economic considerations and the affordability of its recommendations.

The salary of the Chief Land Registrar and Chief Executive is set by the Department for Business, Energy and Industrial Strategy. The HM Land Registry Remuneration Committee, acting on the authority of the HM Land Registry Board, considers pay recommendations provided by line managers and decides the distribution of performance pay in the annual pay review for HM Land Registry senior civil servants, in accordance with Cabinet Office guidance.

Both base pay and non-consolidated performance related awards are dependent on performance, which is assessed through an annual appraisal system for senior civil servants. More details can be found on GOV.UK (search ‘senior civil service performance management’).

During the year Non-Executive Board Members Catrina Holme and Tim Franklin both chaired the Remuneration Committee before being replaced by Diana Breeze (Chair) and Chris Morson.

The current members of the Remuneration Committee are Non-Executive Board members Diana Breeze (Chair) and Chris Morson, Chief Executive and Chief Land Registrar Graham Farrant and Director of Human Resources and Organisation Development Caroline Anderson.

Policy for other civil servants

Pay for HM Land Registry employees who are not in SCS grades is determined each year following negotiation and consultation between HM Land Registry and the unions and is subject to approval by the Secretary of State, taking into account guidance issued by HM Treasury.

Service contracts

The Constitutional Reform and Governance Act 2010 requires Civil Service appointments to be made on merit on the basis of fair and open competition.

The Recruitment Principles published by the Civil Service Commission specify the circumstances when appointments may be made otherwise.

Unless otherwise specified, all the directors covered by this report hold appointments that are open-ended and are subject to a notice period of three months.

Early termination for the directors on open-ended service contracts, 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 at www.civilservicecommission.org.uk

Off-payroll disclosure

Off-payroll engagements as at 31 March 2018, for more than £245 per day and that last for longer than six months.

	2017/18	2016/17
Existing engagements as of 31 March 2018	21	13
Of which existing:
— for less than one year at time of reporting	20	10
— for between one and two years at time of reporting	1	2
— for between two and three years at time of reporting	–	1
— for between three and four years at time of reporting	–	–
— for four or more years at time of reporting	–	–
New off-payroll engagements, or those that reached six months in duration, between 1 April 2017 and 31 March 2018, for more than £245 per day and that last for longer than six months.
New engagements, or those that reached six months in duration, between 1 April 2017 and 31 March 2018	23	12
Of which:
— have been assessed as caught by IR35	19
— have been assessed as not caught by IR35	4
Number engaged directly (via PSC contracted to department) and are on the departmental payroll.	1
Number of engagements reassessed for consistency / assurance purposes during the year.	23
Number of engagements that saw a change to IR35 status following the consistency review.	–
Off-payroll engagements of board members and/or senior officials with significant financial responsibility between 1 April 2017 and 31 March 2018
Number of off-payroll engagements of board members, and/or, senior officials with significant financial responsibility, during the financial year.	–	–
Total number of individuals on payroll 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.	12	10

Expenditure on Consultancy

	2017/18	2016/17
	£’000	£’000
Cost of Consultancy	676	834
Total	676	834

Salary and performance pay – executive directors (see note 1) 2017/18

	Salary	Performance pay	Benefits in kind	Pension benefits (see note 2)	Total
	£’000	£’000	To nearest £100	£	£’000
Graham Farrant Chief Executive and Chief Land Registrar	195 – 200	–	–	–	195 –200
Catherine Vaughan (see note 3) Director of Finance and Business Services	45 – 50	10 – 15	–	19,000	75 – 80
Annual equivalent	(125 – 130)	–	–	–	(125 – 130)
John Abbott Director of Digital, Data and Technology	115 – 120	10 – 15	–	45,000	170 – 175
Caroline Anderson Director of Human Resources and Organisation Development	95 – 100	–	–	37,000	130 – 135
Alasdair Lewis (see note 4) Director of Legal Services	55 – 60	–	–	(4,000)	55 – 60
Annual equivalent	(95 – 100)	–	(95 – 100)
John Peaden (see note 5) Director of Operations	25 – 30	–	–	(3,000)	20 – 25
Annual equivalent	(100 – 105)	–	(100 – 105)
Ruth Curry (see note 9) Acting Director of Finance and Business Services	50 – 55	–	–	91,000	145 – 150
Annual equivalent	(90 – 95)	–	(90 – 95)
Chris Pope (see note 6) Chief Operations Officer	55 – 60	–	–	21,000	75 – 80
Annual equivalent	(130 – 135)	–	(130 – 135)
Karina Singh (see note 7) Director of Transformation	45 – 50	–	–	119,000	160 – 165
Annual equivalent	(105 – 110)	–	(105 – 110)
Mike Harlow (see note 8) General Counsel and Deputy Chief Land Registrar	20 – 25	–	–	7,000	25 – 30
Annual equivalent	(120 – 125)	–	(120 – 125)
Mike Westcott Rudd (see note 10) Board Legal Adviser	85 – 90	–	–	15,000	100 – 105

1. Audited.

2. The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) plus (the real increase in any lump sum) less (the contributions made by the individual). The real increases exclude increases due to inflation or any increase or decreases due to a transfer of pension rights.

3. Catherine Vaughan’s appointment ended on 3 September 2017.

4. Alasdair Lewis’s appointment ended on 31 October 2017.

5. John Peaden’s appointment ended on 30 June 2017.

6. Chris Pope joined on 25 October 2017.

7. Karina Singh joined on 1 November 2017.

8. Mike Harlow joined on 1 February 2018.

9. Ruth Curry was placed on temporary promotion on 1 September 2017. The disclosed amounts above relate to her appointment as Acting Director of Finance and Business Services.

10. This includes a period from 1 November 2017 to 31 January 2018 where Mike Westcott Rudd was acting Director of Legal Services.

Salary and performance pay – executive directors (see note 1) 2016/17

	Salary	Performance pay	Benefits in kind	Pension benefits (see note 2)	Total
	£’000	£’000	To nearest £100	£	£’000
Graham Farrant Chief Executive and Chief Land Registrar	190 – 195	–	–	–	190 –195
Craig Lester (see note 3) Assistant Chief Executive	45 – 50	–	–	43,000	90 – 95
Annual equivalent	(90 – 95)	(90 – 95)
John Peaden Director of Operations	95 – 100	10 – 15	–	33,000	140 – 145
Alasdair Lewis Director of Legal Services and Deputy Chief Land Registrar	95 – 100	–	–	21,000	115 – 120
Catherine Vaughan Director of Finance and Business Services	125 – 130	10 – 15	–	49,000	185 – 190
Caroline Anderson Director of Human Resources and Organisation Development	90 – 95	5 – 10	–	36,000	135 – 140
John Abbott Director of Digital, Data and Technology	115 – 120	–	–	64,000	180 – 185
Mike Westcott Rudd (see note 4) Board Legal Adviser	80 – 85	–	–	11,000	90 – 95

1. Audited.

2. The value of pension benefits accrued during the year is calculated as (the real increase in pension multiplied by 20) plus (the real increase in any lump sum) less (the contributions made by the individual). The real increases exclude increases due to inflation or any increase or decreases due to a transfer of pension rights.

3. Craig Lester’s appointment ended on 31 October 2016.

4. Mike Westcott Rudd was appointed to the Board as Legal Adviser on 1 April 2016.

5. None of the directors paid into a stakeholder pension.

Salary – Non-Executive Board Members (see note 1)

	2017/187	2016/17
	£’000	£’000
Michael Mire Non-Executive Chair	55 – 60	35 – 40
Annual Equivalent	(55 – 60)
Tim Franklin (see note 2) Non-Executive Chair Non-Executive Board Member	15 – 20	30 – 35
Annual Equivalent	(20 – 25)
Catrina Holme (see note 3) Non-Executive Board Member	5 – 10	20 – 25
Annual Equivalent	(20 – 25)
Gerard Connell (see note 4) Non-Executive Board Member	5 – 10	20 – 25
Annual Equivalent	(20 – 25)
Claire Wren (see note 5) Non-Executive Board Member	–	–
Diana Breeze (see note 6) Non-Executive Board Member	0 – 5	–
Annual Equivalent	(20 – 25)
Kirsty Cooper (see note 7) Non-Executive Board Member	0 – 5	–
Annual Equivalent	(20 – 25)
Chris Morson (see note 8) Non-Executive Board Member	0 – 5	–
Annual Equivalent	(20 – 25)
Tony Buffin (see note 9) Non-Executive Board Member	0 – 5	–
Annual Equivalent	(20 – 25)
Doug Gurr (see note 10) Non-Executive Board Member	–	–
Annual Equivalent
Angela Morrison (see note 11) Non-Executive Board Member	0 – 5	–
Annual Equivalent	(20 – 25)

1. Audited.

2. Tim Franklin’s appointment ended on 9 January 2018.

3. Catrina Holme’s appointment ended on 7 July 2017.

4. Gerard Connell’s appointment ended on 28 August 2017.

5. Claire Wren represents the interests of UK Government Investments (UKGI) and does not receive any remuneration from HM Land Registry.

6. Diana Breeze’s appointment started on 8 January 2018.

7. Kirsty Cooper’s appointment started on 8 January 2018.

8. Chris Morson’s appointment started on 8 January 2018.

9. Tony Buffin’s appointment started on 8 January 2018 and ended on 31 March 2018.

10. Dr Doug Gurr’s appointment started on 9 February 2018.

11. Angela Morrison’s appointment started on 20 March 2018.

Salary

‘Salary’ includes gross salary, reserved rights to London weighting or London allowances, recruitment and retention allowances and any

other allowance to the extent that it is subject to UK taxation. The tables on pages 80 to 82 are based on accrued payments made by HM Land Registry and thus recorded in these accounts.

Benefits in kind

The monetary value of benefits in kind covers any benefits provided by HM Land Registry and treated by HM Revenue & Customs as a taxable emolument.

Performance awards

Awards are based on performance levels attained and are made as part of the performance review process.

The awards reported relate to the performance in the year in which they were paid to the individual.

Therefore the awards reported in 2017/18 relate to performance in 2016/17 and the comparative awards reported for 2016/17 relate to performance in 2015/16.

Pension benefits (see note 1)

	Real increase in pension and lump sum at 60		Total accrued at March 2018		Cash equivalent transfer value (CETV) at 31 March		Real increase in CETV after adjustment for inflation and changes in investment factors
	Pension	Lump sum	Pension	Lump sum	2018	2017
	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Graham Farrant (see note 2) Chief Executive and Chief Land Registrar	–	–	–	–	–	–	–
Catherine Vaughan Director of Finance and Business Services	0 – 2.5	–	5 – 10	–	70	60	6
John Abbott Director of Digital, Data and Technology	2.5 – 5.0	–	10 – 15	–	109	82	14
Caroline Anderson Director of Human Resources and Organisation Development	0 – 2.5	–	5 – 10	–	130	96	23
Alasdair Lewis Director of Legal Services and Deputy Chief Land Registrar	0 – 2.5	0 – 2.5	40 – 45	120 – 125	949	907	(4)
John Peaden Director of Operations	0	0	50 – 55	150 – 155	1,153	1,161	(3)
Ruth Curry Acting Director of Finance and Business Services	2.5 – 5.0	7.5 – 10	25 – 30	65 – 70	459	371	61
Chris Pope Chief Operations Officer	0 – 2.5	–	5 – 10	–	120	103	13
Karina Singh Director of Transformation	5 – 7.5	5 – 7.5	30 – 35	35 – 40	511	405	85
Mike Harlow General Counsel and Deputy Chief Land Registrar	0 – 2.5	–	15 – 20	–	265	252	3
Mike Westcott Rudd Board Legal Adviser	0 – 2.5	2.5 – 5.0	30 – 35	95 – 100	725	696	15

1. Audited.

2. Graham Farrant chose not to be covered by the Civil Service pension arrangements during the reporting year.

3. No director paid into a stakeholder pension.

Civil Service pensions

Pension benefits are provided through the Civil Service pension arrangements. From 1 April 2015 a new pension scheme for civil servants was introduced – the Civil Servants and Others Pension Scheme or alpha, which provides benefits on a career average basis with a normal pension age equal to the member’s State Pension Age (or 65 if higher). From that date all newly appointed civil servants and the majority of those already in service joined alpha. Prior to that date,

civil servants participated in the Principal Civil Service Pension Scheme (PCSPS). The PCSPS has four sections: 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 will switch into alpha sometime between 1 June 2015 and 1 February 2022. All members who switch to alpha have their PCSPS benefits ‘banked’, with those with earlier benefits in one of the final salary sections of the PCSPS having those benefits based on their final salary when they leave alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate. Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the two schemes.) Members joining from October 2002 may opt for either the appropriate defined benefit arrangement or a ‘money purchase’ stakeholder pension with an employer contribution (partnership pension account).

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

Benefits in alpha build up in a similar way to nuvos, except that the accrual rate in 2.32%. In all cases members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004.

The partnership pension account is a stakeholder pension arrangement. The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member) into a stakeholder pension product chosen by the employee from a panel of providers. The employee does not have to contribute, but where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution). Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally-provided risk benefit cover (death in service and ill health retirement).

The accrued pension quoted is the pension the member is entitled to receive when they reach pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over pension age. Pension age is 60 for members of classic, premium and classic plus, 65 for members of nuvos, and the higher of 65 or State Pension Age for members of alpha. (The pension figures quoted for officials show pension earned in PCSPS or alpha – as appropriate.

Where the official has benefits in both the PCSPS and alpha the figure quoted is the combined value of their benefits in the two schemes, but note that part of that pension may be payable from different ages.)

Further details about the Civil Service pension arrangements can be found at the website www.civilservicepensionscheme.org.uk.

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.

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.

Reporting of Civil Service and other compensation schemes – exit packages (see note 1)

Exit package cost band	Number of compulsory redundancies		Number of other departures agreed		Total number of exit packages by cost band
	2017/18	2016/17	2017/18	2016/17	2017/18	2016/17
£0–£10,000	–	–	4	–	4	–
£10,001–£25,000	–	–	–	–	–	–
£25,001–£50,000	–	–	1	–	1	–
£50,001–£100,000	–	–	4	2	4	2
£100,001–£150,000	–	–	2	–	2	–
£150,001–£200,000	–	–	–	–	–	–
>£200,000	–	–	–	–	–	–
Total number of exit packages	–	–	11	2	11	2
Total cost	–	–	£587,258	£154,035	£587,258	£154,035

1. Audited.

There were no ex-gratia payments in 2017/18 (2016/17: none).

Compensation for loss of office

Redundancy and other departure costs have been paid in accordance with the provisions of the Civil Service Compensation Scheme, a statutory scheme made under the Superannuation Act 1972. Exit costs are accounted for in full in the year of contractual agreement to depart. Where applicable, the additional costs of buy-out of reduced pension benefit are met by HM Land Registry 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.

Pay multiples (see note 1)

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

Total remuneration includes salary, non-consolidated performance-related payments and benefits in kind. It does not include employer pension contributions and the cash equivalent transfer value of pensions.

	2017/18	2016/17
Band of highest paid director’s total remuneration (£’000)	195 – 200	190 – 195
Median total (£)	25,378	25,797
Remuneration ratio	7.8	7.5

1. Audited.

In 2017/18 no employees received remuneration in excess of the highest paid permanent director.

Remuneration ranged from £195,000 – £200,000 to £15,000 – £20,000 (2016/17: £190,000 – £195,000 to £15,000 – £20,000).

Staff report as at 31 March 2018

	2017/18	2016/17
Number of employees (including fixed-term appointments)	5,216	4,862
Permanent full-time equivalents	4,719	4,148
Number of apprentices	321	277
Number of temporary/contract staff	27	32
Average sickness days per employee	7.5	6.4
Average number of training days per employee	5.2	5.9
Training days per apprentice	25	31.3
Training spend as percentage of salary bill	0.4%	0.4% (see note 1)
Female employees	60.1%	60%
Employees working part-time	32.6%	35%
Employees from ethnic minorities	4.8%	4%
Employees who report they have a disability	8.6%	9%

1. The 2016/17 comparative figure for training as a percentage of the salary bill has been recalculated using the same basis as 2017/18 for consistency.

Staff costs for 2017/18

	Permanent staff	Apprentices	Others	Total
	£’000	£’000	£’000	£’000
Salaries	135,511	7,551	7,579	150,641
Social security costs	13,431	188	618	14,237
Other pension costs	24,528	1,317	1,237	27,082
Total staff costs	173,470	9,056	9,434	191,960

Gender analysis at 31 March 2018

	Male	Female	Total
Non-executive board members	4	3	7
Executive directors (see note 1)	5	3	8
Senior Civil Service – band (see note 1)	4	4	8
Senior Civil Service – band (see note 1)	9	2	11
Permanent employees (not including SCS)	1,771	2,698	4,469
Apprentices	136	185	321

1. Some Senior Civil Service employees are also directors and are included in both categories.

Average full-time equivalent in year

Recruitment

HM Land Registry is governed by the Civil Service Commission Recruitment Principles which requires the selection of people for appointment to be on merit and on the basis of fair and open competition.

In addition, all our job opportunities are subject to the Guaranteed Interview Scheme which ensures disabled people will progress to the next stage of the selection process if their application meets the minimum criteria. It is our policy to ensure that any tests used do not discriminate against disabled candidates.

Recruitment activity has addressed a number of requirements including:

• addressing front-line needs to meet and maintain service delivery standards and to address future workforce sustainability;
• enhancing specific capability areas, particularly in digital transformation and agile development skills; and
• establishing a new senior management structure with clear accountabilities to provide greater support and drive resilience and succession planning.

We have supplemented our digital transformation and agile development capabilities through the engagement of delivery partners through the Government’s Digital Services Framework.

Our apprenticeship schemes were expanded to provide the opportunity for people to gain a qualification in business administration, information technology or cyber-security. These entry routes allow them to learn the technical skills that could lead to future permanent employment with HM Land Registry, so creating the basis of a sustainable workforce.

In support of our core service standards, and to supplement our substantive workforce, a number of short-term fixed-term appointments were made, allowing our more experienced colleagues to focus on more complex core registration activities.

Off-payroll contractors have also been used to meet short-term needs in more specialist areas, and information regarding compliance and disclosures is included on page 79.

Health and wellbeing

We are committed to maintaining the health and wellbeing of our colleagues and this year we have rolled out an attendance, health and wellbeing framework and associated delivery plan.

The framework focuses on four key areas, which are:

• culture – we will create the right environment to support attendance, health and wellbeing;
• prevention – we will help ourselves and others to stay healthier and stay in work;
• intervention – we will ensure the right support is provided at the right time; and
• return to work – we will support our people back to work in a timely way.

The framework helps us to focus on certain types of conditions as a matter of priority such as mental health.

We have delivered a variety of initiatives to support our colleagues and the organisation, including:

• retendering of our Occupational Health and Employee Assistance Programme contracts and subsequent relaunch and promotion of the services offered;
• cross-HM Land Registry promotion and participation in health campaigns, including menopause, breast cancer and mental health awareness;
• delivery of a range of formal and informal training initiatives providing line managers with guidance and advice on sickness absence procedures and supporting staff dealing with mental health issues; and
• appointment of a new health and wellbeing EXB champion.

We have also been reviewing and developing a different approach to mental health, together with the departmental trade unions. Through our attendance, health and wellbeing delivery plan (PDF) we are:

• acting to reduce mental health stigma;
• reviewing manager support and capability in dealing with mental health;
• reviewing the wording of the sickness absence and stress management procedures; and
• continually promoting the Employee Assistance Programme.

Later in the year we launched a mental health action plan aligned to the four priority areas of our Attendance, Health and Wellbeing Framework, as well as the Civil Service Strategic Priorities for Health and Wellbeing in respect of mental health, and the recent Thriving at work: the Stevenson/ Farmer review of mental health and employers.

We want the action plan to make a real difference in the way we view, talk and act on mental health in HM Land Registry; an organisation where mental health issues are widely understood and destigmatised, where our people feel confident to talk about

their mental ill health and where our managers are able to identify and understand the range of mental health issues and support those affected.

Capability

We have continued to expand our apprenticeship programme in our Operations, Digital, Data and Technology, Human Resources and Organisation Development and Legal directorates. A new internal programme has been established for paralegal and senior paralegal apprenticeships which establishes a career path from Operations casework to legal services.

A total of 179 people have started an apprenticeship with us this year. This includes 21 current colleagues. Approximately 70% of apprentices remain with us following successful completion of their apprenticeship.

We have focused on developing our caseworker skills and are piloting a new caseworker assessment process to identify current skill levels and areas for development.

Leadership and management training have been a high priority, we have invested in our executive director development programme and a series of masterclasses for our senior leaders that will continue into 2018/19.

A new line manager training path has been piloted as part of our Model Office project involving 23 new managers promoted from within HM Land Registry. A further 270 training days were dedicated to new line manager training across the rest of the organisation this year.

During 2017/18 we spent £577,608 on external training across a wide range of professions and work areas. An average of 5.2 training days per employee was provided to all colleagues, including casework/technical training, digital skills training, soft skills and personal development.

Employee involvement

We continue to engage both informally and formally with our colleagues and their representatives.

Chief Executive and director blogs have been issued during the year on a weekly basis and colleagues have been encouraged to respond to these with the aim of creating open and honest dialogue and exchange of views.

Managers are expected to have regular monthly discussions with individual team members to openly discuss employee performance, ideas for improvements to working practices, wider organisational issues and any employee concerns.

We meet regularly with our trade unions. The Chief Executive and members of his team formally meet representatives at the Departmental Whitley Council meetings twice a year. There are structures in place for local Whitley meetings, and unions are consulted on specific issues. Union representatives are invited to attend a board each year.

Informal six-weekly dialogue between the Chief Executive and trade union leads has continued during the year. Day-to-day operation of employment relations is managed through fortnightly engagement and consultation meetings between senior management and departmental trade union representatives and through fortnightly Model Office meetings.

During the year we have again seen positive improvements in our engagement scores in the Civil Service People Survey and regular internal surveys held during the year have shown these improvements have been maintained. We continue to be committed to further improvements in engagement and an executive lead has responsibility for an engagement key performance indicator and action plan to create an environment where everyone feels valued and connected.

Constructive discussion with unions at both departmental and local level, in addition to encouraging staff involvement on other committees (including health and wellbeing, social and sports, diversity and charity), and directors’ visits with question and answer sessions, are all essential in ensuring our colleagues’ views are heard and understood.

Diversity

We have a long and successful history of engagement with equality and diversity issues through a successful network of staff affinity groups, diversity champions across the organisation, and EXB sponsors for all protected characteristics. Staff surveys and other statistics show significantly low rates of bullying, harassment and victimisation claims and there have been no tribunals related to equalities discrimination.

We have just completed a strategic review of our overall approach to diversity and inclusion to ensure it is aligned with our future ambitions under our Business Strategy and People Strategy and reflects the wider Civil Service ambition of being the most inclusive UK employer by 2020. As a result, we have created new networks and redefined roles to move towards a more inclusive approach to diversity and inclusion

including developing an ambitious action plan for 2018 to 2022 which will focus on the key areas of culture, recruitment, talent and accountability and assurance.

As new policies are being developed we undertake analysis of the potential impacts on equality to ensure they are articulated, understood and addressed appropriately. Equality analysis outcomes are recorded and refreshed throughout the development of a policy or change and considered as part of the decision-making process. After implementation, policies are reviewed and monitored to ensure there are no unexpected impacts.

We undertake periodic equal pay audits and in 2017 published a gender pay gap report. This showed a mean pay gap of 9%. We pay women the same rate as men for doing the same job. The gap relates to women being more highly represented in junior grades; in addition, the majority of our part-time staff are women. In conjunction with our Women’s Network an action plan has been put in place which includes a programme to develop women for leadership roles and ensuring that part- time opportunities are the norm for all our roles.

Parliamentary accountability and audit report

Fees and charges (see note 1)

	2017/18			2016/17
	Income	Total costs	Surplus	Income	Total costs	Surplus
	£’000	£’000	£’000	£’000	£’000	£’000
Registration of title	304,550	253,924	50,626	299,591	237,240	62,351
Land Charges and Agricultural Credits	6,875	897	5,979	6,267	1,429	4,838
Commercial	5,760	2,603	3,157	5,567	3,326	2,241
	317,185	257,424	59,762	311,425	241,995	69,430

1. Audited.

HM Land Registry applied cost allocation and charging requirements as set out in HM Treasury guidance. However, due to the demand for our services exceeding our expectations, the recommended rate of return has been exceeded.

Losses and special payments (see note 2)

	2017/18		2016/17
	Number of cases	Value of payment	Number of cases	Value of payment
		£’000		£’000
Losses over £300,000	–	–	–	–
Special payments over £300,000	–	–	–	–

2.Audited.

Graham Farrant
Chief Executive and Chief Land Registrar
29 June 2018

The Certificate and Report of the Comptroller and Auditor General to the Houses of Parliament

Opinion on financial statements

I certify that I have audited the financial statements of HM Land Registry for the year ended 31 March 2018 under the Government Trading Funds Act 1973.

The financial statements comprise: the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Reserves, Cash Flow Statement; and the related notes, including the significant accounting policies. These financial

statements have been prepared under the accounting policies set out within them. I have also audited

the information in the Accountability Report that is described in that report as having been audited.

In my opinion:

• the financial statements give a true and fair view of the state of HM Land Registry’s affairs as at 31 March 2018 and of its retained surplus for the year then ended; and
• the financial statements have been properly prepared in accordance with the Government Trading Funds Act 1973 and HM Treasury directions issued thereunder.

Opinion on regularity

In my opinion, in all material respects the income and expenditure recorded in the financial statements have been applied to the purposes intended by Parliament and the financial transactions recorded in the financial statements conform to the authorities which govern them.

Basis of opinions

I conducted my audit in accordance with International Standards on Auditing (ISAs) (UK) and Practice Note 10 ‘Audit of Financial Statements of Public Sector Entities in the United Kingdom’. My responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of my certificate. Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2016. I am independent of HM Land Registry in accordance with the ethical requirements that are relevant to my audit and the financial statements in the UK. My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Responsibilities of the Chief Executive for the financial statements

As explained more fully in the Statement of Accounting Officer’s Responsibilities, the Chief Executive as Accounting Officer is responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Auditor’s responsibilities for the audit of the financial statements

My responsibility is to audit, certify and report on the financial statements in accordance with the Government Trading Funds Act 1973.

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that

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

As part of an audit in accordance with ISAs (UK), I exercise professional judgment and maintain professional scepticism throughout the audit. I also:

• identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of HM Land Registry’s internal control.
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on HM Land Registry’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the entity to cease to continue as a going concern.
• evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

Other Information

The Chief Executive as Accounting Officer is responsible for the other information. The other information comprises information included in the annual report, other than the parts of the Accountability Report described in that report as

having been audited, the financial statements and my auditor’s report thereon. My opinion on the financial statements does not cover the other information and I do not express any form of assurance conclusion thereon. In connection with my audit of the financial statements, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with

the financial statements or my knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work I have performed,

I conclude that there is a material misstatement of this other information, I am required to report that fact. I have nothing to report in this regard.

Opinion on other matters

In my opinion:

• the parts of the Accountability Report to be audited have been properly prepared in accordance with HM Treasury directions made under the Government Trading Funds Act 1973;
• in the light of the knowledge and understanding of the entity and its environment obtained in the course of the audit, I have not identified any material misstatements in the Performance Report or the Accountability Report; and
• the information given in the Performance Report and Accountability Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which I report by exception

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

• adequate accounting records have not been kept or returns adequate for my audit have not been received from branches not visited by my staff; or
• the financial statements and the parts of the Accountability Report to be audited are not in agreement with the accounting records and returns; or
• I have not received all of the information and explanations I require for my audit; or
• the Governance Statement does not reflect compliance with HM Treasury’s guidance.

Report

I have no observations to make on these financial statements.

Sir Amyas C E Morse

Comptroller and Auditor General
National Audit Office
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP

11 July 2018