Corporate report

The Coal Authority annual report and accounts 2019 to 2020: Performance report

Published 24 September 2020

1. Overview

The Coal Authority is a non-departmental public body and partner organisation of the Department for Business, Energy and Industrial Strategy (BEIS).

1.1 Our mission:

Making a better future for people and the environment in mining areas.

1.2 Our purpose:

• we keep people safe and provide peace of mind

• we protect and enhance the environment

• we use our information and expertise to help people make informed decisions

• we create value and minimise cost to the taxpayer

We use our skills to provide services to other government departments and agencies, local governments and commercial partners.

We contribute to the delivery of the UK Government’s Industrial Strategy and the environmental, social and economic priorities of the UK, Scottish and Welsh Governments. By sharing our knowledge and expertise we support them, and our partners, to create cleaner, greener nations for us all.

As a public body that holds significant geospatial data we work with the Geospatial Commission to look at how, by working together, we can unlock significant value across the economy.

1.3 Our governance:

We’ve an independent board responsible for setting our strategic direction and holding us to account. The board ensures that our statutory duties are carried out effectively and that we bring our mission, purpose and values to life. Our chair and board members have relevant experience to support our work.

Non-executive directors are recruited and appointed to the board by the Secretary of State for BEIS. Executive directors are recruited to their posts by the board and some of them are then appointed to the board, also by the Secretary of State for BEIS.

1.4 Our values

Trusted

• we act with integrity

• we’re open and transparent

• we deliver on our commitments

Inclusive:

• we promote a culture of mutual respect

• we recognise that our differences make us stronger

• we work with others to achieve our mission

Progressive:

• we’re open minded and innovative

• we recognise that the past can help us shape the future

• we listen and learn

2. The work we do

During the course of our work in 2019-20:

2.1 Keeping people safe and providing peace of mind

10,858 mine entry inspections were carried out

471 surface hazard reports were investigated

352 subsidence damage claims were assessed

2.2 Using our information and expertise to help people make informed decisions

228,529 mining reports were delivered

1,998 permits to intersect coal were issued

8,975 planning consultations were responded to

2.3 Protecting and enhancing the environment

122 billion litres of water were treated

27,000m² of our 350,000m² of reed beds were replaced

4,500 tonnes of iron solids were prevented from entering water courses

2.4 Creating value and minimising cost to the taxpayer

£2 million was saved by recycling reedbed material

£5.3 million of income was generated through our advisory services

77% of removed iron solids was recycled

3. Chair’s foreword

I’m very pleased to introduce our 2019-20 annual report. This has been a further year of change and development for the organisation and I am delighted to see that our new mission, purpose and values have been embedded and that our new customer strategy and commitments are already making a real difference. All of this has been underpinned by strong delivery and an ongoing commitment to innovation and opportunity.

Last year I said in my foreword that it would be my last, after 7 years as Chair. I’m delighted to have been invited by the Secretary of State for Business, Energy and Industrial Strategy (BEIS) to extend this role for one final year and to have the opportunity to comment once again on the work of the Coal Authority.

When we started the year, we had no idea that by the end of it we would be operating in a fundamentally different way with more than 90% of the organisation working from home to deliver our essential services during the COVID-19 global pandemic. My heart goes out to all of those who have been impacted by COVID-19. Our response focused initially on delivering essential services which protect life and wellbeing, but due to the commitment and dedication of our staff we’ve been able to deliver the majority of our customer facing activities, safely, in this new way. I cannot thank our people enough for their dedication and commitment through these challenging times.

Whilst COVID-19 is continuing to have a major impact on the whole of society, the rest of my foreword will focus on our activities in 2019-20 prior to lockdown measures being introduced in March 2020.

Lisa Pinney, our Chief Executive, will describe 2019-20 as a year of incident response and it certainly has been that. Additionally it has been a year of innovation with a number of opportunities being grasped. I am thrilled that there are now a number of significant schemes in the pipeline to build decarbonised heat networks for housing and for commercial/industrial/agricultural premises fuelled by warm water from former coal mines which will contribute to BEIS and government policy for net zero carbon. Our sponsoring Minister, Kwasi Kwarteng, recently described this as “potentially transformational” and went on to say that “we’ve this huge historic legacy in terms of coal, and being able to use that footprint and turn it into a source of green energy – that’s incredibly positive.”

Our approach to this is to continue working on markets for by-products and catchment based work with partners on reducing water waste, delivering public good and providing income. Our commitment to research and development (R&D) continues and we’ve just received funding with partners for a new metal mine water R&D site in Cornwall to complement the coal mine water site we have at the National Coal Mining Museum for England in Wakefield.

We remain focused on sustainability and to contributing to habitat and net zero carbon ambitions in each of the nations we serve. In 2019 we published our first Biodiversity and Resilience of Ecosystems report for the Welsh Minister for Environment, Energy and Rural Affairs and we were recently delighted to sign a Sustainable Growth Agreement with the Scottish Environment Protection Agency as part of our work on the Leven catchment in Fife. Our board is committed to the ambition of us being a net zero carbon organisation by 2030 and to fully understanding the potential wider society benefits of the habitats we create and the contribution we could make from decarbonised mine water heat and energy. As part of that we continue to invest in solar energy and to date have saved £237,000 in power costs and 436 tonnes of carbon from entering the atmosphere.

I have been delighted to see a greater customer service ethos embedded in the organisation and the launch of our new customer standards. Most important are the real life examples.

I was pleased to see how we supported the community of Emersons Green in Bristol when new mining information became available and how we’ve worked with Welsh Government and the Welsh Local Authorities and Natural Resources Wales to develop with pace a new colliery tip assessment framework, database and mapping layers to allow consistent categorisation and action planning and to provide information and reassurance to customers on the new coal tips hotline that we operate.

The board and I are committed to taking the learning and opportunity from the current challenging times and use it to help us become an even more effective organisation and a truly ‘great place to work’. We’ve refreshed our commitments to diversity and inclusion in light of Black Lives Matter and appreciate we’ve more to learn and more to do. We’ll be publishing our second gender pay gap report shortly. We’ve made further progress but need to continue with our plan and strong commitment to reducing the gap further. We hope that greater flexible working in the future and use of technology can be part of helping us to attract more diverse talent and to bring in a greater range of voices to inform our work.

Our people remain our most important asset. Over the past year we’ve invested in further leadership and skills development to ensure that how we work continues to be as important as what we do. To develop and deliver further innovation and opportunity, we need to continue to be bold in our approach and work across the organisation as ‘One Coal Authority’ to deliver better outcomes and efficiencies.

We’ll continue to support our people and their wellbeing, especially through the current challenges, in new and different ways. I would like to once again take the opportunity to say thank you to our staff for their continued commitment and significant delivery throughout a complex and challenging year.

In 2019 the Coal Authority celebrated 25 years and, as part of this, I was honoured to give a presentation celebrating the history and evolution of the organisation over that time. We’ve changed significantly over the period from an organisation focused on licensing the remaining industry and dealing with legacy issues to one which manages remediation and legacy and seeks innovation and opportunity, working to make our ex-coal mines and communities part of our new low carbon future. It’s the constant evolution which has kept the organisation relevant and, for me, made it such a privilege to lead. Thank you for allowing me to work with you and learn so much from you over the past 8 years as chair.

I’d like to make some final comments about my board colleagues. Each and every one of them has contributed to the success of the Coal Authority and made my job interesting, rewarding and fun. Lisa Stanger left her role as Strategy and Performance Director on 31 March 2020 after 10 years and I would like to record my thanks for her major contribution to our success. I am looking forward to working with the board and all our staff during 2020-21 to build further on our success and position the Coal Authority to emerge from COVID-19 stronger and even more efficient and customer focused.

Stephen Dingle, Chair

4. Chief executive’s report

This year has been shaped by extreme weather and incident response and I’m extremely proud of the professionalism and dedication of our people in working long hours and using our skills and expertise to support partners and protect the communities we serve.

This includes working in the Yorkshire area, where we have 83 pumping stations, to support the multi-agency response for flooding, working with Welsh Government and the UK Government to manage the impacts of extreme rainfall on old colliery spoil tips in Wales and responding to 471 reported surface hazards and 352 subsidence damage claims. On the mine water treatment side we kept our 82 treatment schemes operating throughout the fluctuating weather, undertook further research and development to plan for new schemes and worked with partners to manage the impacts of mine water pollution caused by the extreme weather.

At the end of the year we, alongside the rest of the country, were impacted by COVID-19. We focused our response on public safety, the protection of drinking water and the environment and the wellbeing of our staff. Our key workers and priority suppliers have continued to work throughout lockdown to make hazards safe, continue high priority colliery tip inspections and to keep mine water treatment plants running to prevent pollution. The majority of our other services have been delivered through home working. I’m extremely grateful for the commitment of all our people who, whilst facing their own fears, family pressures and caring responsibilities, have done their very best to support our customers.

Last year I made a number of commitments for 2019-20 and I’m delighted to say that we’ve made strong progress on each.

• We’ve worked with staff, customers and partners to develop and publish our new customer standards and our new complaints and commendations policy. We’ve continued to build a strong customer service ethos into our processes and approach, making us easier to engage with and do business with. We’ll use monitoring and feedback to build on this year on year.

• We’ve continued to become more visible through our social and other media presence - we increased the number of our followers across our 3 main social media channels by more than 30%. During the same period, our social media posts made more than 1.3 million impressions. Meanwhile our work was frequently featured on both television and radio, with stories regularly appearing in both the mainstream media and specialist press. We’ve also made progress in updating our website and ensuring it is more accessible and in line with what our customers want. We’re rolling out improved signage and information boards to all our sites on a prioritised basis, have undertaken some site open days and used more video content to help bring our work and sites to life.

• We’ve continued to develop our commercial and value added ethos by providing expert services to a number of partners, further developing options and markets for a number of by-products and securing funding and partnerships for a number of mine water heat and energy schemes. These will provide decarbonised heat to homes, commercial units and agriculture and are now recognised by government as an important part of the net zero carbon solution. Our coal mines were essential to the development and industrialisation of Great Britain and we hope that they will now play a key role in our low carbon future.

In 2020-21 we’ll continue to support the governments of the 3 nations we serve by delivering appropriately during COVID-19 restrictions and promoting economic recovery by supporting the housing market, providing expertise and advice to infrastructure providers and working with our supply chain and partners to deliver our capital build programme and mine water energy infrastructure projects.

Our board have committed to achieving net zero carbon by 2030. We hope to go beyond that and make a wider contribution to society through the habitats we create and the decarbonised heat and energy storage that we want to provide. This year we’ll establish a baseline position and a clear plan for progress to 2030 and beyond.

We’ll continue to provide our core duties and 24/7 incident response and reassurance for anyone impacted by coal mining gas, subsidence or hazards. And we’ll do further work with Welsh Government to ensure Welsh colliery spoil tips are inspected and to inform a future approach to regulation and maintenance for the long term reassurance of local communities.

We couldn’t do any of this without our great people – or the diverse and talented people we’ll need to recruit in the year ahead. Our focus on diversity and inclusion is even more important and we’ve committed to take action to become a more actively anti-racist organisation. We’ve a lot more to do and we encourage you to hold us to account as we go forwards.

As Stephen says, we’ll take the learning and opportunity from this unusual period of working and ensure that we can be a more flexible, tech-enabled and inclusive ‘great place to work’ for the future.

Lisa Pinney MBE, Chief Executive and Accounting Officer

5. Our performance

We’ve made good progress over the first 2 years of our 5 year plan, setting the foundations to create a more sustainable organisation able to deliver our mission for years to come. As well as continuing to invest in our future, 2019-20 has been a year of strong delivery of our core roles of keeping people safe, protecting the environment, and providing good quality information to help others make informed decisions.

We’re developing our balanced scorecard against 4 areas - our people, customers and stakeholders, internal processes, and managing our money. Our key achievements in these areas are outlined below.

5.1 Our people

We continue to make good progress against our people plan.

Our 2019 people survey showed that 81% of our people are proud to work here (compared with a sector average of 65%) and that we’ve improved the support to our people in a number of areas. It’s also helped us to highlight areas for improvement and further action.

We’ve implemented our action plans on diversity, inclusion, mental health and wellbeing. We’ve improved policies, further embedded our mental health first aiders and promoted support groups and networks.

We’ve continued to focus on learning and development and have launched our leadership development and ‘development for all’ programmes.

We’re making good progress on our ‘great place to work’ commitments and have simplified our approaches to make it easier for our people to deliver great service to our customers. View our ‘Our people’ section for more information on the progress of our ‘great place to work’ commitments.

5.2 Customers and stakeholders

We’ve made clear progress on our commitment to improve our customer service. This was underpinned by feedback from our customers, partners and staff. We used the UK Customer Services Index for public services for the first time and to provide a benchmark for the future. This told us that 77.5% of our customers are satisfied with the service they receive from us (compared to a sector average of 77.7%) and identified some specific areas for improvement, including complaints handling and resolution, better digital access to our services and greater clarity around response timescales. We’ve taken account of this in our new customer strategy and new customer standards which were published in October 2019. We’ve also published a new complaints and commendations procedure which provides clearer sections for subsidence claimants and other customers to provide better clarity.

We worked effectively with partners on the emergency response to storms Ciara, Dennis and Jorge, using our subsidence pumping stations to minimise flooding and operating mine water treatment works in innovative ways to minimise pollution. In Wales we worked with the Welsh and UK Governments to minimise the impacts of severe flooding on colliery tips and provide reassurance to the communities below them. We now provide a ‘tips helpline’ (0800 021 9230) and are continuing to work with partners to create a central registry of tips in Wales, undertake high risk inspections and plan for a new regulatory regime for their future management.

We continue to provide a 24/7 incident response line (0800 288 4242) for mining hazards such as subsidence, mine gas and shaft collapse. We’ve inspected 10,858 mine entries, repaired 81 properties, and resolved subsidence claims relating to 450 historic mining hazards under infrastructure, land and buildings.

We’ve invested £9.9 million in the treatment of water polluted by abandoned coal and metal mines in order to protect the natural environment and continued our research and development programme to deliver broader outcomes and opportunities for the future.

We’ve worked with a range of national and local stakeholders on the nation’s first significant district heating scheme from mine water heat at Seaham in the North East of England. This will provide decarbonised heating to 750 affordable homes, 750 private homes, a school, shops and a medical and innovation centre from our nearby mine water treatment scheme. Historic coal mines are a source of geothermal heat which has huge potential, with 25% of Great Britain’s homes sitting on the coalfields. There are a number of further schemes in the pipeline and we’re working closely with the UK, Scottish and Welsh Governments to maximise the opportunity to help achieve their net zero carbon and climate change policies and aspirations and to create cost effective, low carbon heating for people and communities in mining areas.

5.3 Internal processes

During the year we’ve comprehensively reviewed, refreshed and simplified our key control framework document and governance manual, and reviewed our levels of delegated authority, to better empower our people within clearer frameworks.

We’ve made good progress on producing a new risk management and assurance framework. This will more clearly articulate our risk appetite and improve risk management processes to better facilitate dynamic, real time reporting and management of risks. This will be rolled out more broadly and embedded during 2020-21.

Our programme approach is helping us to make better decisions and deliver greater efficiencies and/or multiple outcomes across our capital programme and other projects.

5.4 Managing our money

We’ve continued to work closely with the Department for Business, Energy and Industrial Strategy (BEIS), our sponsor department, so that they understand our financial risks and opportunities and help ensure that we deliver our programmes and activities in line with agreed budgets.

Of our expenditure, 36% was funded outside of BEIS grant in aid during the year. We generated £5.4 million income from our advisory services and by-products, using our expertise to help other government organisations manage their risks and to create opportunities from our mining legacy.

Our Innovation and Research and Development programmes have generated savings of £2.2 million to offset our costs during the year, including £2.0 million of avoided costs through sustainably maintaining our mine water treatment reedbeds by recycling 24,521 tonnes of excavated material, 120 tonnes of cut reed and 2,800 tonnes of ochre.

View our ‘Financial review’ section for more information on our finances.

6. Outlook for 2020-21

Throughout 2020-21 we’ll continue to focus on our mission of making a better future for people and the environment in mining areas.

We’ll support the ambitions of the governments we serve for a green recovery from COVID-19 and continue to enable infrastructure and sustainable growth through our work. We’ve taken learning from working in new ways and will use this and the potential for greater flexibility to improve our future delivery, better support the communities we serve, support the wellbeing of the people who work for us and seek to attract more diverse talent to our future roles.

Through lockdown and beyond we’ve continued our essential work to protect life, protect drinking water and protect the environment. From supporting households affected by subsidence or mine gas to protecting drinking water, rivers and beaches from pollution from mines our work keeps communities safe and ensures that rivers, beaches and other local spaces can be enjoyed by local people. This is our core work and will continue alongside our 24/7 incident response to provide reassurance to communities across the coalfields.

We’ll promote sustainable economic recovery by supporting the housing market, providing expertise and advice to infrastructure providers and providing good quality information to help people make informed decisions.

We’ll work with our supply chain and partners to maximise the delivery of our capital build programme and mine water heat and energy infrastructure projects, promoting employment and enabling ‘levelling up’ across coalfield areas.

We’ll aim to make clear progress towards our commitment to becoming a net zero carbon organisation by 2030. We’ll establish a baseline position for our emissions and develop a clear plan for progress to 2030 and beyond. This will include a focus on nature and biodiversity which are essential to climate change resilience.

We’ll work with our sponsor department BEIS, the devolved governments, local councils, public and private sector partners and green finance partners to grow the pipeline of mine water heat and energy projects which will provide decarbonised and cost effective heating for social housing, residential and industrial developments and horticulture to help deliver the climate change ambitions of England, Scotland and Wales.

We continue our commitment to making our services more accessible and better enable our customers to engage with us in a range of ways that meet their needs.

We’ll build on the learning from our involvement with several major incidents over the past year and further develop our systems and structures to modernise our approach based on best practice.

All this will be underpinned by our work to create an even more modern, inclusive, vibrant and welcoming workplace and ways of working. We continue to focus on employee wellbeing and development. This approach has been key to our COVID-19 response and recovery and we’ll develop it further.

We stand with our black colleagues, customers, partners and friends. We’re listening and learning and will take action to become more actively anti-racist. This includes educating our people, changing our approach to recruitment and creating more opportunities to hear different voices and perspectives in shaping our approaches. We know we’ve a lot more to do. Please hold us to account as we go forwards.

7. Our business model

Our business model forms part of our business plan. The model supports how we’re going to deliver to our customers, invest in the future and build capabilities to enable us to achieve our goals and unlock our long term value.

Our purpose sits at the centre of our Business Model, underpinning the 4 key considerations already discussed in “Our Performance”:

• Our people

• Customers and stakeholders

• Internal processes

• Managing our money

By constantly improving our relationships with our people, customers and stakeholders, strengthening our processes and doing all of this within a sound financial governance framework, we’re able to use our information and expertise:

• to help people make informed decisions and

• deliver on our commitments to manage the risks associated with mining

Whilst at the same time creating value and minimising cost to the taxpayer.

7.1 Our purpose

• we keep people safe and provide peace of mind

• we protect and enhance the environment

• we use our information and expertise to help people make informed decisions

• we create value and minimise cost to the taxpayer

8. Our business plan

Our business plan places our purpose at the heart of what we do. Our improvement programmes and commercial activities will ensure that we’ll remain able to undertake these core duties as efficiently and effectively as possible.

8.1 Lead, support and develop our people:

• our leadership training inspires, motivates and helps staff achieve their full potential

• we’ve capability to deliver our statutory duties in perpetuity

• we promote diversity and inclusion

• our staff are empowered and engaged

• our staff reward mechanism is aligned to development

8.2 Pursue commercial opportunities:

• we provide advisory services to enable other organisations to manage their risks

• we create value from our mining legacy and by-products

• we develop products and services to create value from our information and data

8.3 Implement a customer strategy:

• we understand our customers and focus on their needs

• our customer data is measured, understood and used to add value

• best practice ways of working are embedded

8.4 Invest in our governance and processes:

• risk management is refreshed and risk reporting is dynamic

• effective business planning and programme offices support effective prioritisation and delivery

• governance is simple and empowers people within frameworks

9. Strategic risks

9.1 Risk: Public safety risk

Despite Coal Authority controls, a significant surface hazard caused by past coal mining or incident at a Coal Authority legacy site causes serious injury or fatality.

Update and mitigation

We’ve well established processes to manage our risks including proactive inspection and communication programmes and a 24/7 triaged response line.

We adopt a proportionate response to manage this risk but it cannot be eliminated.

Relative rating

High (stable).

9.2 Risk: COVID-19 (staff wellbeing and business continuity)

COVID-19 (or similar health event) and associated restrictions affect staff health, safety or wellbeing and the ability of the Coal Authority to undertake its core functions.

Update and mitigation

By 31 March 2020 our business continuity plan had been invoked and the organisation was home working. A senior management team was in place to make real time decisions and ensure staff wellbeing was protected and our communication effective. Critical, front line activities were carefully prioritised and all critical operations continued throughout the period.

At time of publication, we continue to carefully prioritise, bringing activities back online as restrictions ease.

Relative rating

High (decreasing).

9.3 Risk: COVID-19 financial impact

The economic impact caused by COVID-19 affects Coal Authority income.

Update and mitigation

Initial forecasts suggest that income from mining reports, information and permits services would be lower than budget by up to £3 million during 2020-21. At time of publication income levels are volatile with future months difficult to predict. We continue to work closely with the Department for Business, Energy and Industrial Strategy (BEIS) to manage this pressure on our budget.

Relative rating

High (stable).

9.4 Risk: Disruptors in the information market

Due to limited resource and focus on core duties we fail to improve our information or develop new products and services, leading to missed opportunities for the Coal Authority and others to create value from our information and data.

Update and mitigation

We’ve been successful in releasing our data for others to use and opening up the coal mining reports market resulting in a lower market share and reduced income from this market as expected.

We’ll continue to work closely with the Geospatial Commission, its partner bodies, and other organisations to identify opportunities to share our data and information, providing excellent services to help our customers make informed decisions.

Relative rating

High (stable).

9.5 Risk: Take up of government services

Due to external funding pressures and economic uncertainty, opportunities to provide services to government organisations develop more slowly leading to missed opportunity to help them manage their risks or create value from mining legacy and lost financial contribution.

Update and mitigation

We’ve reviewed our markets and rationalised the by-products and advisory services we’re offering and the partners we’re engaging with.

We’ve improved our profile and strengthened key relationships. We continue to work with others, including the Department for Environment, Food and Rural Affairs (Defra) and Natural Resources Wales (NRW) to manage mine water remediation and have established a tips incident response team on behalf of the Welsh Government.

Relative rating

Medium (stable).

9.6 Risk: Innovation

Due to funding constraints and the inherent risk in innovation, progress to develop new technology, processes and products may take longer than planned leading to delay in value creation and cost savings.

Update and mitigation

This programme is overseen by our innovation board.

Actions taken during this spending review period have reduced operating costs of treating mine water by £2.2 million in 2019-20 and we continue to work with partners to develop opportunities for mine water energy schemes.

We’ll continue to collaborate with our sponsor department BEIS, British Geological Survey and other organisations to maximise our success.

Relative rating

Medium (stable).

9.7 Risk: Operating cost pressures

Sustained pressure on the costs of operating ageing mine water treatment schemes and the reactive and unpredictable nature of our public safety work lead to a short term funding gap that causes us to slow or stop key strategic programmes.

Update and mitigation

Our Research and Development and Innovation programmes are generating savings and will reduce the future net cost of operating our schemes (see above). Our capital refurbishment programme will ensure our schemes remain effective and efficient to operate.

We work closely and transparently with BEIS to share our plans and manage our financial risks.

BEIS are supportive of our strategy which is designed to enable us to manage the UK’s coal mining legacy as efficiently as possible.

Relative rating

Medium (stable).

9.8 Risk: Exit from EU

Uncertainty in respect of the nature of exit from the EU may lead to impact on funding and policy for the Coal Authority and its partners and short term disruption.

Update and mitigation

We’ve reviewed the elements of our business that may be affected in the short term by EU exit, for instance supply of chemicals to our mine water treatment plants, and have plans in place to manage these. The cost of this preparatory work has been undertaken within our existing business teams.

We do not expect a significant impact on our activities from EU exit, but will continue to monitor the situation carefully. Our business continuity plans have been reviewed and updated so that colleagues are clear on how to deal with minor disruption.

Relative rating

Low (increasing).

9.9 Risk: Devolution

Policy differences continue to grow between the UK, Scottish and Welsh Governments in areas relevant to our work, causing inefficiency, uncertainty or reputational risk.

Update and mitigation

The 3 nations we serve have developed different policies during COVID-19 which has caused additional work and, at times, different guidance and approaches for our people and operations in each country. There is a possibility that the policy differences between the nations could continue to grow, especially with EU exit on the horizon. We’ll continue to work closely with the nations in delivering our work to maximise the delivery of UK and national outcomes.

Relative rating

Medium(increasing).

10. Financial review

We’ve continued to make good progress with our strategy of building a sustainable organisation that will continue to make a better future for people and the environment in mining areas.

We’ve continued to invest in innovation and our mine water treatment schemes, maintained strong operational performance and responded well to exceptional weather events and critical incidents. We work closely with the Department for Business, Energy and Industrial Strategy (BEIS) to communicate the risks and sensitivities behind our funding requirements and have delivered in line with our expected control totals. BEIS grant in aid received in the year was £34.8 million (2018-19: £28.5 million). The main drivers behind the increase in grant in aid are reduced mining report income (aligned to our objective of opening up a competitive market for mining reports) and timing of property related clawback income, as well as necessary ongoing investment in our mine water schemes and increased operational mine water and subsidence pumping scheme costs. These factors are explained further in this report. Our advisory services work generated income of £5.3 million (broadly in line with 2018-19: £5.5 million). This reflects success in delivering for (and with) other government organisations including the Department for Environment, Food and Rural Affairs in England and Natural Resources Wales, as well as support for national infrastructure projects and local authorities in managing the risks associated with mining.

10.1 How we used our money in 2019-20

2018-19 figures are shown in brackets.

Our income was £54.1 million (£51.8 million)

• Mining reports: £9.5 million (£11.7 million)

• Advisory & technical: £5.3 million (£5.5 million)

• By-products & other commercial innovation: £0.1 million (£0.3 million)

• Operator licensing/permissions: £0.8 million (£0.8 million)

• Data licensing: £1.0 million (£0.5 million)

• Property related: £1.4 million (£3.4 million)

• Public safety management fee & other: £0.2 million (£0.4 million)

• Working capital movement: £1.0 million (£0.7 million)

• Grant in aid (BEIS): £34.8 million (£28.5 million)

Our spend was £54.1 million (£51.8 million)

• Operations - Public safety: £12.0 million (£12.7 million)

• Operations - Mine water treatment schemes: £12.6 million (£11.5 million)

• Operations - Subsidence pumping stations: £1.6 million (£1.3 million)

• Development - Planning, licensing, permissions & property: £3.2 million (£2.9 million)

• Data & information: £4.2 million (£3.1 million)

• Commercial: £9.1 million (£8.5 million)

• Innovation: £0.9 million (£1.1 million)

• Mine water treatment schemes - CAPITAL: £8.2 million (£6.2 million)

• Subsidence pumping stations - CAPITAL: £1.3 million (£3.0 million)

• Other - CAPITAL: £1.0 million (£1.5 million)

Income of £18.3 million per the Statement of comprehensive net expenditure is the total of the Income figures above excluding grant in aid and working capital movement.

10.2 Financial statements

Our accounts are dominated by our provisions balance of £2,306.0 million. The rationale and methodology for calculating this are shown at note 13 to the accounts. As in previous years and in line with our accounting policy, this provision for resolving the impacts of past coal mining was reviewed at the end of 2019-20.This balance has remained at materially the same level, increasing by £9.0 million (2018-19: decrease of £2,029.0 million). In line with accounting practice we adjust our cashflows to reflect the time value of money based on assumptions and discount rates provided by HM Treasury. These rates changed significantly for the prior year and were the main driver of 2018-19’s large movement. Our provisions balance is explained at note 13 to the accounts.

10.3 Statement of comprehensive net expenditure

Comprehensive net expenditure for the year to 31 March 2020 was £48.0 million as compared to net income of £2,003.5 million in 2018-19. The large difference between the 2 years is driven by the provision movements outlined above. Excluding these provisions movements, comprehensive net expenditure for the year was £20.7 million (2018-19: £7.8 million), an increase of £12.9 million.

These movements are outlined below:

Total operating income:

Total operating income, which excludes grant in aid, was £18.3 million (2018-19: £22.6 million) reflecting our ongoing strategies to work collaboratively on joined-up cross- governmental projects whilst opening up the mining reports market to competition and enabling others to use our information to manage their risks.

• We’re a long way now from our original near-monopoly position in mining reports, the success of an opening up of the market over the last 5 years. As a result, during the year our mining reports revenue has dropped by £2.2 million to £9.5 million, offset by increased fees of £0.5 million from the sale of our data to external bodies to broaden the market.

• At £5.3 million, our advisory and technical income has remained broadly similar to 2018-19’s income (£5.5 million).

• Income from by-products has fallen this year from £0.3 million to £0.1 million. This reflects last year’s major success in finding uses for our ochre by-product, and also an increased focus during 2019-20 in areas likely to offer large future benefits, most notably the mine heat research discussed elsewhere in this report.

• The other major difference from 2018-19 is the reduced ‘clawback’ income from sale of properties previously owned by the Coal Authority - £1.1 million compared to £3.1 million in 2018-19. This income is unpredictable and the timing of this is largely outside our control.

Expenditure

• Staff costs of £15.1 million showed an increase of £1.0 million compared to the previous year, largely due to rises in employer contribution rates to the Civil Service pension scheme.

• Purchase of goods and services (not including costs previously provided) increased by £0.6 million to £9.0 million, reflecting increasing unit costs of power and chemicals used in our environment work, and increased maintenance across our schemes driven in part by past capital constraints. We’re seeking to reduce this growing bill in future by increasing capital investment, as discussed below.

• Another driver of cost increases is our commitment to incident response, which has seen for example, a £0.1 million spend in our response to the destabilisation of a number of Welsh tips as a result of the winter’s extreme rainfall and flooding. Similarly our response to maintaining the operation of our pumping stations in South Yorkshire during exceptional wet weather (£0.4 million) also reflects our priority of keeping people safe and protecting the environment.

• Depreciation, revaluation and impairment charges were this year £15.0 million, an increase of £7.2 million on 2018-19. This reflects the largest investment in our mine water treatment schemes and subsidence pumping stations for a decade. As our accounting policy in note 1.1 to the accounts shows, such expenditure is immediately impaired rather than being carried as an asset. This investment will reduce future costs on maintaining and refurbishing the schemes in future by offering increased efficiency and lowering the requirement for future maintenance.

More information is available in notes 3 and 4 to the accounts.

Statement of financial position

Net liabilities at £2,303.0 million increased by £13.5 million against 2018-19’s £2,289.5 million. Key factors were:

• provisions against future liabilities increased by £9.0 million as a result of the review in provisions outlined above. Further information is available at note 13 to the accounts. The reduction in property, plant and equipment balances of £5.1 million to £9.1 million, is largely due to the completion and immediate impairment of phase 2 of the mine water scheme at Lynemouth, Northumberland and a subsidence pumping station at Great Heck, North Yorkshire. This is most easily seen in note 6 to the accounts which shows the reclassifications into such schemes of £4.3 million from the opening balance of assets under construction, and their subsequent impairment. £0.9 million of the reduction in property, plant and equipment is due to the transfer of 5 previously operational transit houses to assets held for sale as part of the Coal Authority’s disposal programme. It increased by a similar amount for those additions which were not immediately expended

• intangible assets have dropped slightly by £0.3 million, the result of there being no major product enhancements to our systems in 2019-20

• continued focus on disposing of surplus property resulted in a £0.2 million drop in the value of investment properties after the sale of surplus land in the North East of England

• although our underlying debtors balance has remained broadly consistent year on year, a provision for bad debts (‘expected credit losses’) against the effects of the COVID-19 pandemic has reduced the carrying balance by £0.4 million

• cash and cash equivalents stand at £5.1 million (2018-19: £6.0 million): see the section below on cash flow for details on movements

• trade and other payables have seen a significant reduction of £1.4 million, driven mainly by discharge of liabilities relating to industry claims

Cash flow

There was a net decrease in cash during the year of £0.9 million. Constituent parts of this movement were:

• the receipt of £34.8 million grant in aid from BEIS (2018-19: £28.5 million)

• a net cash outflow from operating activities of £25.1 million (2018-19: £26.1 million), due to movements in working capital

• a net cash outflow from investing activities of £10.6 million (2018-19: £6.2 million). This relates to the purchase of property, plant and equipment as part of our ongoing programme to develop and build mine water treatment schemes and subsidence pumping stations. The increased investment is partly offset by £1.1 million of ‘clawback’ receipts (2018-19: £3.1 million) from the sale of properties previously owned by the Coal Authority

At 31 March 2020 we held £5.1 million cash (2019: £6.0 million). This includes £2.9 million (2019: £4.9 million) of ring fenced funds in respect of security called in from mining operators that have been liquidated. The movement in called in security is used to discharge these industry claim liabilities as part of our operating activities.

Going concern

To the extent that they are not met from our other sources of income, our liabilities may only be met by future grants or grants in aid from our sponsor department BEIS. This is because, under the normal conventions applying to parliamentary control over income and expenditure, such grants may not be issued in advance of need.

Paragraph 14(1) of Schedule 1 to the Coal Industry Act 1994, states: “The Secretary of State shall, in respect of each accounting year, pay to the Coal Authority such amount as he may determine to be the amount required by the Coal Authority for the carrying out during that year of its functions under this Act.”

On that basis, the board has a reasonable expectation that we’ll continue to receive funding so as to be able to meet our liabilities. We’ve therefore prepared our accounts on a going concern basis.

11. Our people

Everything we do and deliver is based on people – be that our customers, partners or those who work for us. Our people have again shown their dedication and professionalism through months of incident response and in their attitude and commitment to ensuring we continue to deliver through COVID-19. We’re committed to supporting them and providing a truly ‘great place to work’.

Our people plan, launched in October 2018, focuses on the wellbeing, development and support of our people and was based on listening to what would make us a ‘great place to work’. Through 2019-20 we’ve continued to take action to embed it by increasing empowerment, ensuring everyone has a voice, developing more transparent policies and rolling out new development programmes for leadership and behavioural training alongside technical development. This includes our accredited ‘Lead to Succeed’ programme and our ‘Development for All’ programme which supports our strategy to create a sustainable, highly skilled, diverse and motivated workforce.

Our 2019 people survey had a 92% response rate and showed that our people are starting to feel the benefits of the changes that we’ve made. Of those surveyed, 93% felt that they have the skills they need to do their job effectively, 85% felt that we’re committed to creating a diverse and inclusive workplace and there were significant improvements in scores relating to management and workload. At the same time there are clear areas where we’ve more to do. Our people would like greater clarity about our corporate direction and are concerned about the opportunity for career development.

Although 91% said that they would feel able to report bullying and harassment we’re concerned that 12% felt they had been impacted by it in the last 12 months. We’ve clear plans for action, working with our people, over the year ahead.

As part of our focus on career development we’ve created our first technical competency framework (on mine gas) for core operational skills. This allows clear assessment and development and supports better knowledge transfer of key skills – especially those related to mining legacy. We’ll continue the roll out of technical competency frameworks during 2020-21. We’ve also increased the number of our people in apprenticeships, enabling them to develop essential skills and experience.

We recognise the value of engaging with our people and listening to their views and suggestions. Our staff engagement group has been an integral part of supporting and driving forward programmes of delivery and has achieved great results in supporting a number of initiatives and events such as the design of our office refurbishment and promotion of wellbeing.

Our diversity and wellbeing networks, led by our employees, have developed and strengthened this year, giving a voice to our people to help us shape our policies and future ways of working.

We’re an inclusive and disability confident employer and hope that by working more flexibly in the future we can attract more diverse talent. We also continue to be a Campaign Against Living Miserably (CALM) company. We’ve further embedded our agenda on equality, diversity and inclusion, developing a programme of events which promote learning about different cultures, sharing life experiences and celebrating difference.

We’ve delivered unconscious bias workshops across the business and reviewed all programmes of learning to ensure diversity and inclusion is a golden thread throughout.

We’ve made further progress to reduce our gender pay gap, moving the median from 31.6% to 31.5% and the mean from 28.3% to 21.9% in 2019. We’re committed to reducing the gap further and will publish our 2020 gender pay report shortly.

We’ve an established trained team of mental health first aiders and, in line with our health and wellbeing plan, our staff have attended awareness training facilitated by Mental Health First Aid England. We celebrated Learning at Work Week and Mental Health Awareness Week by running a series of events to promote the importance of wellbeing. This has helped colleagues gain a better understanding of what mental health is and how we can help ourselves and others in managing it.

We continue to actively develop positive links with local communities by giving talks at local schools and for the first time one of our female engineers gave a talk at a local girl guiding meeting. We’ve also taken part in various fundraising for good causes, including a fancy dress rounders event in aid of the Alzheimer’s Society in July 2019 and in December 2019 our Wellbeing group organised donation boxes for the Framework Housing Association and Bluebell Wood Children’s Hospice.

To mark Volunteers’ Week at the beginning of June, many of our staff shared their experiences of what volunteering means to them which gave us the perfect opportunity to launch our policy which encourages every member of staff to take a day a year to support a local charity or a community organisation.

As always there is more to do but we’re proud of the progress we’ve made this year and are committed to continuing the journey towards truly being a ‘great place to work’.

12. Health, safety and wellbeing

We put people’s health, safety and wellbeing at the heart of what we do.

Our core aims for health, safety and wellbeing (HS&W) are to:

• ensure that all those working on behalf of the Coal Authority go home safe and well

• manage those risks to the public from the legacy of coal mining for which we’re responsible

Our HS&W performance remains strong and we’re proud of the way our teams, supply chain and partners work together to keep each other safe. HS&W observations reporting remains high and inspections and audits have increased, allowing us to take prompt action and learning to prevent accidents from happening wherever possible. We remain committed to positive mental as well as physical health and throughout COVID-19 we’ve reviewed every aspect of what we do, and our support to our people, to put safety and wellbeing at the heart of our delivery.

We’re not complacent. We regularly review our performance and undertake root cause learning reviews to ensure improvements can be implemented with pace. We’ll continually strive to improve our performance to ensure that everyone who works for us can go home safe and well.

Measure	2019-20	2018-19
HS&W observations - unsafe acts (staff and contractors)	3,051	3,226
HS&W observations - good practice examples (staff and contractors)	324	147
HS&W inspections (staff)	412	379
Accidents - no time lost (staff)	5	3
Accidents - lost time (staff)	0	0
Incidents - Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR)[footnote 1]	2	0

Our focus for 2020-21 is to continue to review our approach against the latest COVID-19 guidance in all 3 nations to keep our people, our supply chain and partners, our customers and members of the public safe. This will include a strong emphasis on mental health and wellbeing.

13. Sustainability and the environment

We want to play our part in creating a more resilient and biodiverse world, by taking real action to combat climate change and to create space for nature. We’re developing plans to be a net zero organisation by 2030 and hope to go beyond that and make a wider contribution to society through the habitat we create and the decarbonised heat and energy storage that we can provide.

This year we’ll establish a baseline position and a clear plan for progress to 2030 and beyond. These plans will include our latest thinking on catchment management, mine water heat, nature based solutions and biodiversity.

Our current sustainability plan sets out our existing objectives and we’ve made good progress on our action plans to achieve the defined clear targets. Our next plan will be more ambitious.

During 2019-20 we’ve continued to invest in solar energy and to date have saved £237,000 in power costs and 436 tonnes of carbon from entering the atmosphere. We’ve met the government target for 25% of fleet vehicles being ultra-low emission by 2022.

In 2019 we published our first Biodiversity and Resilience of Ecosystems report for the Welsh Minister for Environment, Energy and Rural Affairs and we were recently delighted to sign a Sustainable Growth Agreement with SEPA as part of our work on the Leven catchment in Fife.

Working in partnership and learning from others will remain key to our future approach.

Sustainability drivers	2019-20	2018-19
Greenhouse gas emissions (tonnes)	1,169	3,001
Carbon emissions from mine water operations CO2e (tonnes)	3,753	4,435
Carbon emissions from head office CO2e (tonnes)	216	322
Carbon intensity - business travel (tCO2e/100,000km)	15.8	14.2
Water usage m³	1,145	1,199

Our data (summarised in the table above) shows that we continue to make good progress against our sustainability plan. Business travel remains a challenge for us. We continue to focus on reducing it by using alternate technology where possible but the operational nature of our business means that we need to travel to attend incidents and carry out work at our sites, many of which are in remote locations. Reducing emissions from our fleet will be a continued focus as part of our broader work towards becoming a net zero carbon organisation.

This performance report has been approved by the chief executive and accounting officer.

Lisa Pinney MBE, Chief Executive and Accounting Officer

14 September 2020

1. The incidents were one specified injury, one 7-day incapacitation, both to contractors ↩