Corporate report

The Coal Authority annual report and accounts 2023 to 2024: Accountability report

Updated 12 August 2024

1. Accountability report

The accountability report meets key accountability requirements to Parliament. The requirements are based on the Companies Act 2006, as adapted for the public sector.

It encompasses the matters required to be dealt with in a directors’ report and in the remuneration and staff report, as set out in chapter 6 of the Companies Act.

It covers information including directors’ salaries and other payments, governance arrangements and the audit certificate and report. It is signed and dated by the accounting officer.

The accountability report consists of 3 main parts. These are the:

1. corporate governance report, dealing with the Coal Authority’s governance structures and how they support the achievement of the Coal Authority’s objectives
2. remuneration and staff report, containing information about senior managers’ remuneration and other staff related disclosures required by the Companies Act and other governmental sources
3. parliamentary accountability and audit report, comprising additional disclosures required by Parliament, and a view on such matters as regularity of expenditure, fees and charges and long term expenditure trends. It includes the audit certificate and report

1.1 Corporate governance report

The corporate governance report consists of 3 main parts. These are the:

1. directors’ report, which covers a variety of statutory disclosures not outlined elsewhere in the annual report and accounts
2. statement of accounting officer’s responsibilities, which sets out clearly the responsibilities assumed with respect to the annual report and accounts by the nominated accounting officer, and the legislative basis for them
3. governance statement, which explains the composition and organisation of the Coal Authority’s board and governance structures and how they support the achievement of the Coal Authority’s objectives

2. Statement of the accounting officer’s responsibilities

Under paragraph 15(1)(b) of Schedule 1 to the Coal Industry Act 1994 the Secretary of State, with the consent of HM Treasury, has directed the Coal Authority to prepare for each financial year a statement of accounts in the form and on the basis set out in the Accounts Direction.

The accounts are prepared on an accruals basis and must give a true and fair view of the state of affairs of the Coal Authority and of its income and expenditure, Statement of Financial Position 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 the Secretary of State, including the relevant accounting and disclosure requirements, and apply suitable accounting policies on a consistent basis
• make judgements and estimates on a reasonable basis
• state whether applicable accounting standards, as set out in the government financial reporting manual, have been followed, and disclose and explain any material departures in the financial statements
• prepare the financial statements on a going concern basis
• confirm that the annual report and accounts as a whole is fair, balanced and understandable and take personal responsibility for the annual report and accounts and the judgements required for determining that it is fair, balanced and understandable

The accounting officer for the Department for Energy Security and Net Zero has designated the chief executive as accounting officer of the Coal Authority.

The responsibilities of an accounting officer, including responsibility for the propriety and regularity of the public finances for which the accounting officer is answerable, for keeping proper records and for safeguarding the Coal Authority’s assets, are set out in Managing Public Money published by the HM Treasury.

As the accounting officer, I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the Coal Authority’s auditors are aware of that information.

So far as I am aware, there is no relevant audit information of which the auditors are unaware.

3. Directors’ report

The Coal Authority presents its report and audited financial statements for the year ended 31 March 2024.

The accounts have been prepared in a form directed by the Secretary of State with the consent of HM Treasury in accordance with paragraph 15(1)(b) of Schedule 1 of the Coal Industry Act 1994 (“the Act”).

The accounting officer authorised these financial statements for issue on the date of certification by the Comptroller and Auditor General.

3.1 Functions, duties and powers of the Coal Authority

The powers and functions of the Coal Authority were initially set out in legislation by the Coal Industry Act 1994 and the Subsidence Act 1991 (as amended by the Coal Industry Act 1994). We assumed our functions on 31 October 1994.

These functions are set out in our publication scheme and relate to the coal industry and the management of interests inherited from the British Coal Corporation, licensing of coal mining operations, dealing with coal mining subsidence and providing information.

The 1994 Act has been further amended by subsequent legislation, including the Water Act 2003 and the Water Services (Scotland) Act 2005.

This has extended the Coal Authority’s powers to prevent or lessen the effect of the discharge of polluted water from a coal mine onto any land or into watercourses.

The Energy Act 2011 extended the Coal Authority’s powers to use its expertise in other non-coal mining related contexts including action to protect water quality from the effects of polluted mine water discharge from abandoned mines, as required by the Water Framework Directives.

3.2 Review of operations

The chief executive’s report gives a summary of our activities during the year and the future outlook.

3.3 Finance risk management

The governance statement sets out the governance structures that we’ve used to monitor and control risk and the board’s approach to risk management.

This, with the performance report, also identifies and discusses the significant risks and the mitigation in place.

We’ve a strong system of financial control and active financial risk management. We’ve no borrowings and rely on grant in aid and other income to fund our cash requirements.

We therefore have minimal exposure to liquidity, credit and cash flow risk. All assets and liabilities are denominated in sterling and so there is no exposure to currency risk. We do not hold any assets that are directly impacted by interest rate movements nor do we engage in any hedge accounting.

We hold some items on the Statement of Financial Position that are discounted using rates specified by HM Treasury, specifically provisions.

HM Treasury vary these discount rates from time to time, which will affect both the Statement of Financial Position and the Statement of Comprehensive Net Expenditure. In 2023-24 this was a decrease of £876 million (decrease of £4,467 million in 2022 to 2023 and an increase of £2,759 million in 2021 to 2022). Please refer to note 13 in the accounts.

3.4 Future developments

Our future developments and objectives have been discussed in other areas of the annual report, including the chief executive’s report and the strategic risks section of the performance report.

3.5 Research and development activities

We undertake a range of research and development activities to improve the efficiency of our operations and in particular reduce the long term net cost of treating mine water.

This includes finding uses for our by-products (for instance iron ochre) and promoting the use of mine water flowing through abandoned mine workings as a source of geothermal heat and low carbon energy.

Updates on these initiatives are outlined within the performance report.

3.6 Post balance sheet events

We’ve no post balance sheet events requiring disclosure.

3.7 Branches outside the UK

We’ve no branches outside the UK.

3.8 Donations

We made no political or charitable donations during the year.

3.9 Employee involvement

We’re committed to engaging with staff throughout the business as outlined in our people report.

3.10 Employment

We’re committed to equal opportunities and have a strong focus on diversity and inclusion.

This commitment means that decisions to appoint, reward, train, develop and promote are taken on the basis of skills and abilities, matched against the requirements of the job.

We continue our work to attract, develop and maintain a more diverse workforce.

We are making progress but know there is more to do and we will keep delivering against our equality, diversity and inclusion plan to create a great place to work for everyone.

We seek to attract and retain high calibre employees.

Opportunities for training are given high priority to ensure that all staff can contribute to their own career development.

3.11 Pensions and other post-retirement benefits

Former and current employees who have chosen to join are covered by the provisions of the Principal Civil Service Pension Scheme (PCSPS) which is an unfunded multiemployer defined benefit scheme.

The accounting policy is given in note 1 to the accounts and further information about the scheme is provided in the remuneration and staff report.

3.12 Personal data

There were no Information Commissioner’s Office (ICO) reportable data breaches during the year.

The governance statement provides further details of our information risk management activities.

3.13 Long-term expenditure trends

Long-term expenditure trends are reviewed by the directors as part of the annual review of provisions. Please see note 13 to the accounts.

3.14 Auditors

The Comptroller and Auditor General was appointed under the Coal Industry Act 1994 and reports to Parliament on the audit examination.

The audit fee was £100,000. No remuneration was paid to our auditors for non-audit work and no other services were provided.

3.15 Access to information and complaints

As a public body, we’ve a duty to answer requests under the Freedom of Information Act 2000 (FOIA) and the Environmental Information Regulations 2004 (EIR).

We received 100 requests (FOIA, EIR and Subject Access Requests) during the year.

All requests except 2 have been answered within the statutory deadline or agreed extensions. We have taken learnings from the 2 exceptions and strengthened our processes.

Three requests have gone to appeal and in each case a Coal Authority official, independent from the original process, upheld the Coal Authority’s initial decision.

One of these requests was further appealed to the ICO and upon receipt of the ICO’s initial opinion, the Coal Authority agreed to amend its processes to make the requested information available.

We received 28 letters from Members of Parliament, one from Members of the Scottish Parliament and 5 from Welsh Senedd Members.

We received 34 complaints from members of the public and other customers. One complaint was referred to the ombudsman.

All other complaints were dealt with under our complaints procedure and resolved within the organisation.

Read about the Coal Authority’s complaints procedure: Complaints procedure - Coal Authority - GOV.UK (www.gov.uk).

4. Board of directors

4.1 Board and their interests

No board member of the Coal Authority has any financial interest in the Coal Authority.

A register of interests is maintained, which is open to the public to view at our offices in Mansfield or can be accessed online at our publication scheme.

There were no related party transactions in respect of board members in 2023 to 2024.

Lisa Pinney MBE, chief executive

• appointed as chief executive from 1 June 2018
• appointed as board director from 1 June 2018 to 31 March 2020
• reappointed every 3 years to 31 March 2026

Paul Frammingham, chief finance and information officer

• appointed as board director from 1 April 2011 to 31 March 2014
• reappointed every 3 years to 31 March 2026

Carl Banton, operations director

• appointed as board director from 22 March 2021 to 31 March 2023
• reappointed to 31 March 2026

Jeff Halliwell, chair

• appointed as chair from 1 April 2021 to 31 March 2024
• reappointed as chair from 1 April 2024 to 31 March 2027

Steve Wilson, non-executive director (until 31 March 2024)

• appointed as board director from 1 April 2017 to 31 March 2020
• reappointed to 31 March 2023
• reappointed to 31 March 2024

Jayne Scott, non-executive director

• appointed as board director from 1 April 2019 to 31 March 2022
• reappointed to 31 March 2025

David Brooks, non-executive director

• appointed as board director from 1 April 2022 to 31 March 2025

Bev Smith, non-executive director

• appointed as board director from 1 April 2023 to 31 March 2026

Kate Denham, non-executive director

• appointed as board director from 1 April 2024 to 31 March 2027

5. Governance statement

Our governance statement explains the governance, risk management and control arrangements we have in place to ensure achievement of the Coal Authority’s objectives.

It explains how we ensure that these remain effective as the Coal Authority evolves so that we can continue to make a better future for people and the environment in mining areas.

5.1 The Coal Authority’s governance framework

We’re committed to high standards of corporate governance. We work within a framework document that is reviewed and agreed periodically with the Department for Energy Security and Net Zero.

The Coal Authority’s framework document can be seen on our publication scheme.

This sets out the purpose of the Coal Authority, the core elements of our relationship with our sponsoring body and the framework within which we operate.

The Coal Authority has an established governance framework supported by an appropriate organisational culture and this is further explained through the statement.

5.2 The board and its committees

The Coal Authority has an established governance framework supported by a board of directors.

The board sets and communicates strategic intent and direction, makes strategic decisions that cannot be delegated and monitors and challenges corporate business performance.

Non-executive directors are recruited and appointed to the board by the Secretary of State for the Department for Energy Security and Net Zero.

Statutory executive directors are recruited to their posts by the board and appointed to the board by the Secretary of State for the Department for Energy Security and Net Zero.

During 2023 to 2024 we held 3 board stakeholder events, one each in Scotland, Wales and England.

Alongside these meetings the board made site visits to Annette Street in Glasgow, Scotland, Hartington mine water scheme and Morton Colliery in Derbyshire, England, and Ynysarwed and Glyncastle mine water treatment schemes in Neath Port Talbot, Wales.

Other board and committee meetings are held in person or by use of videoconferencing to obtain the benefits of a hybrid approach.

The innovation and engagement director, people and resources director, salinity programmer director and community and emergency response director attend the board by invitation.

Other senior managers attend the board or committees to present papers, join strategic discussions and support their learning and development.

During 2023 to 2024 the Coal Authority had 8 statutory directors (5 non-executive and 3 executive).

Steve Wilson left the Coal Authority Board on 31 March 2024.

In February 2024 Kate Denham’s appointment as non-executive director was announced. Kate’s formal tenure began on 1 April 2024. She attended the January 2024 audit and risk assurance committee and January 2024 meeting of the board as an observer.

With effect from 1 June 2023 the board established the saline mine water programme assurance committee which provides scrutiny and assurance of our inland salinity programme. The committee is chaired by Bev Smith.

In 2023 to 2024 the Coal Authority also supported the Board Apprenticeship Programme, with an apprentice joining the board on a 12 month unique learning, development and placement programme. The programme seeks to enable a wider diversity of individuals to play their part in our boardrooms.

Membership and attendance of the board and its committees is shown in the tables below.

Non-executive directors

	Board (7 meetings)	Audit and risk assurance committee (4 meetings)	People and remuneration (6 meetings)	Health, safety and wellbeing (3 meetings)	Environment and sustainability (3 meetings)	Saline mine water programme assurance committee (2 meetings)
Jeff Halliwell, chair of board	7	Not applicable[footnote 1]	5	1[footnote 1]	2[footnote 1]	Not applicable[footnote 1]
Jayne Scott, chair of audit committee	6	4	Not applicable[footnote 1]	Not applicable[footnote 1]	2	Not applicable[footnote 1]
Bev Smith, chair of health, safety and wellbeing and saline mine water programme assurance committees	5	3	5	3	2	2
David Brooks, chair of people and remuneration committee	7	1[footnote 1]	6	3	2[footnote 1]	Not applicable[footnote 1]
Steve Wilson, chair of environment and sustainability committee	7	4	Not applicable[footnote 1]	1	2	1

Statutory executive directors

	Board (7 meetings)	Audit and risk assurance committee (4 meetings)	People and remuneration (6 meetings)	Health, safety and wellbeing (3 meetings)	Environment and sustainability (3 meetings)	Saline mine water programme assurance committee (2 meetings)
Lisa Pinney MBE, chief executive	7	3[footnote 1]	6[footnote 1]	3[footnote 1]	3[footnote 1]	2[footnote 1]
Paul Frammingham, chief finance and information officer	7	3[footnote 1]	Not applicable[footnote 1]	Not applicable[footnote 1]	Not applicable[footnote 1]	1[footnote 1]
Carl Banton, operations director	7	Not applicable[footnote 1]	2[footnote 1]	1[footnote 1]	3[footnote 1]	1[footnote 1]

5.3 Board performance

Compliance with the corporate governance code

We comply with the corporate governance code in central government departments and government guidance in so far as is relevant and practical for an arm’s length body of our size and complexity. In line with our framework document:

• the board monitors the Coal Authority’s performance in an effective manner, including playing an active role in managing stakeholder relationships
• the board constructively challenges and helps to develop strategy, supported by the effective leadership of the chair who oversees a high standard of discussion and debate at meetings
• the board receives accurate, timely and clear information to support its decision making, which is concise and fit for purpose – this includes frequent updates on the Coal Authority’s financial position, and a corporate scorecard showing achievement against corporate objectives
• the board ensures that a balanced and reasonable assessment of performance is reported to the Department for Energy Security and Net Zero and regularly debates the main risks facing the Coal Authority
• through its audit and risk assurance committee, the board maintains sound risk management and internal control systems
• the board annually reviews the Coal Authority’s corporate governance documentation and the terms of reference for the board’s sub-committees
• the board has an appropriate balance of skills and experience to enable it to discharge its responsibilities effectively
• the people and remuneration committee agrees executive remuneration within the guidelines set by HM Treasury and the Department for Energy Security and Net Zero – non-executive remuneration is set by the Department for Energy Security and Net Zero and reviewed annually

Board performance and effectiveness review

The board undertakes regular evaluation of its own performance and that of its directors. All board members’ performance is appraised annually.

Our most recent board effectiveness review was undertaken during December 2022 and was externally facilitated.

This review considered how the board works together and how different personality types can best engage.

It highlighted areas for the board to be aware of in its decision making.

We captured actions from this alongside an ongoing board committee structure review and agreed these at the January 2023 board.

We have made good progress and expect to close the remaining actions, which relate to developing longer term forward looks for the board and its committees and inviting more external speakers to our meetings, by June 2024.

The board has agreed the terms of reference for its next review, in line with the Cabinet Office arm’s length body board effectiveness review principles – this will take place between May to July 2024.

The board undertakes regular strategy and development sessions outside of formal board meetings to reflect on key aspects of its work, and board members undertake site visits both individually and collectively.

The board reviewed its collective objectives during 2023 to 2024 and agreed new objectives for 2024 to 2025.

The board agreed that it has substantively achieved its objectives and continued to operate effectively during 2023 to 2024.

5.4 Board committees

Audit and risk assurance committee

The audit and risk assurance committee comprises 3 non-executive director members.

During 2023 to 2024 the committee was chaired by Jayne Scott, non-executive director, who has recent, relevant financial experience, with the chief finance and information officer as the nominated executive lead.

Standing attendees are the chief executive as accounting officer, the chief finance and information officer, the head of finance, and the head of business planning, risk and governance.

Internal and external auditors are usually invited to attend all meetings of the committee.

Other senior managers attended the committee to present papers and join discussions.

The committee ensures that we operate effective and integrated risk management and control systems to ensure the overall level of assurance is adequate.

It reviews external audit strategy and outcomes, recommends the approval of the annual report and accounts, and oversees the internal audit function provided by the Government Internal Audit Agency (GIAA).

The committee met 4 times during the year.

During the year the committee has:

• continued to focus on financial reporting risk and reviewed our accounting policies, including review of significant judgements made in preparing the accounts and assumptions underlying our provisions balance
• received regular updates on the risk management and assurance framework, fraud prevention strategy and the Coal Authority’s work to manage cyber risk
• undertaken a “deep dive” session with board and executive leadership team members to consider the Coal Authority’s risk assurance processes and challenge specific strategic risks in detail
• reviewed internal audit reviews undertaken by GIAA including:
  • procurement strategy and controls
  • great place to work programme
  • salinity programme management
  • key financial controls – counter fraud
  • government functional standards assurance
  • cyber security

The internal audit opinion for 2023 to 2024 offered management a ‘moderate’ level of assurance over the adequacy and effectiveness of the framework of governance, risk management and internal controls of the organisation.

It also provided recommendations to enhance controls in specific areas.

These have been adopted as appropriate.

The people and remuneration committee

The people and remuneration committee comprises 3 non-executive director members. During 2023 to 2024 the committee was chaired by David Brooks with the people and resources director as the nominated executive lead.

The people and remuneration committee met 6 times within the year and has continued to support the Coal Authority in improving organisational capability to meet future business requirements.

The committee held its annual light touch effectiveness review in March 2024, and agreed several areas for continuous improvement, including further inclusion of external voices and greater consideration of wider attendees for specific items where it would add value.

During the year the committee has considered:

• personal development review distribution for 2022 to 2023 to ensure the equitable distribution of performance-related pay
• the pay remit principles prior to submission to government
• pay gap reporting
• regular updates from the staff engagement group
• continued engagement on the actions from our 2022 people survey
• people related management information and analytics for areas such as absence, employee retention, recruitment and equality, diversity and inclusion
• the organisation’s approach to recruitment and development
• progress with the great place to work theme of our business plan
• the committee heard from an external speaker

Health, safety and wellbeing committee

The health, safety and wellbeing committee committee comprises 3 non-executive director members.

During 2023 to 2024 the committee was chaired by Bev Smith with the community and emergency response director as the nominated executive lead.

The committee’s main responsibilities are to provide oversight of the Coal Authority’s health, safety and wellbeing plan, ensure a positive health and safety culture is embedded throughout the organisation and advise the board on health, safety and wellbeing matters to support the business plan.

The committee met 3 times during the year. During the year the committee has considered:

• the annual management review which provides assurance on the suitability, adequacy and effectiveness of the safety, health and environment management system and proposed future objectives to enable continued improvement
• health, safety and wellbeing culture and behaviours
• health, safety and wellbeing risks and associated assurance
• the British Safety Council’s 5 star audit of the organisation

Environment and sustainability committee

The environment and sustainability committee comprises 3 non-executive director members.

During 2023 to 2024 the committee was chaired by Steve Wilson with the operations director as the nominated executive lead.

The committee’s main responsibilities are to provide oversight of the Coal Authority’s sustainability plan, and advise the board on environment and sustainability matters to support the business plan.

The committee met 3 times during the year. During the year the committee has considered:

• the organisation’s new sustainability plan
• the organisation’s environmental management system
• sustainability and environmental compliance

Saline mine water programme assurance committee

The board implemented a new committee to provide assurance over a significant new programme to treat inland saline mine water.

This programme is in its early stages and is currently undertaking feasibility studies and options analysis.

During 2023 to 2024 membership of the saline mine water programme assurance committee was 2 non-executive directors, the chief executive, chief finance and information officer, operations director, salinity programme director and head of salinity programme.

During 2023 to 2024 the committee was chaired by Bev Smith with the salinity programme director as the nominated executive lead.

The committee’s main responsibilities are to review and provide challenge to the overall delivery strategy for the programme to ensure it meets strategic requirements, manage the Coal Authority’s risk exposure to an appropriate level and take account of learnings from industry best practice.

The saline mine water programme assurance committee reviews detailed information on the saline minewater programme to gain assurance on programme delivery.

The committee met twice during the year. During the year the committee has considered:

• progress against key programme milestones
• the programme’s governance and approval processes
• the programme’s financial position
• mitigation of key programme risk and issues

5.5 Performance management – executive leadership team

The executive leadership team comprises the chief executive, the chief finance and information officer, the operations director, the people and resources director, the innovation and engagement director, the community and emergency response director and the salinity programme director. Each of these report directly to the chief executive.

Each director is responsible for the leadership and delivery of their directorate and is also collectively responsible for leadership and delivery across the organisation.

During 2023 to 2024 executive leadership team meetings were also attended by the head of legal, the head of development and a further head of department who attended meetings as a development opportunity on a 6 monthly basis.

Fortnightly business meetings have a formalised rolling agenda which considers all aspects of the organisation’s work.

The meeting also considers the chief executive’s monthly update report which provides a high level oversight of how the business is performing as a whole and normally includes:

• a review of organisational performance
• a financial summary report
• a review of movements against the Coal Authority’s corporate risk
• information on our people and the health, safety and wellbeing of our people, suppliers and the public
• updates from each directorate and programme board (quarterly)

The executive leadership team also holds monthly strategy meetings which generally consider more strategic and longer-term items which require more in-depth discussion, steer and shape.

5.6 Financial control

The Coal Authority has a strong system of financial control based on well-defined levels of delegated authority and a clear budgetary framework.

This system has remained effective with no significant control issues noted by internal or external audit during the year.

Matters reserved for the board are clearly set out in the framework of strategic control with further detailed guidance in respect of policies, procedures and delegated authority levels published and available to staff.

The investment and opportunities board is an important part of our financial controls framework and has delegated authority from the chief executive to approve capital expenditure, key programmes, projects and commercial opportunities provided they are:

• in line with the Coal Authority’s strategy as set out in its 3 year business plan agreed by the board
• within the board’s risk appetite
• not a matter reserved to a government department
• in line with other government guidance relevant to the Coal Authority

Once programmes and projects have been approved by the investment and opportunities board they are overseen by a relevant programme board with the investment and opportunities board receiving regular updates and providing further oversight as required.

As part of our financial control framework we undertake an annual detailed review of our provisions for liability arising from past coal mining.

Our business teams validate key assumptions and revise estimates that feed into this balance based on latest information.

This is followed by comprehensive review and challenge by our finance team and members of the executive leadership team and analysis of drivers behind our provisions balance and key movements are presented to the audit and risk assurance committee.

Outputs from the provisions model feed into our annual financial statements (see note 13 to the accounts) as well as providing a framework for our detailed budget setting and medium-term business planning.

5.7 Risk management

Embedded risk management and culture

We have focused on continual improvement of our risk management and assurance processes to promote real time reporting and good quality conversations across all levels of the organisation.

Risk management is live and embedded within a culture that encourages real-time discussion and ownership of risks.

This is evidenced by:

• clear alignment of our strategic risks to our business plan
• a full review of our risk appetite statement by our board, with continued use of risk appetite into our discussions and decision making, including through the investment and opportunities board framework
• ongoing audit and risk assurance committee support, scrutiny and challenge including a deep dive review of our 3 lines of assurance
• processes that ensure, in line with our framework of strategic control, any issue or project that falls outside the board’s risk appetite is formally considered by the board for decision
• monthly risk reviews at a directorate level including horizon scanning and deep dives across directorate and department level risks
• a revised and improved annual risk review process for strategic and directorate level risks
• a risk register that is live, regularly updated and subject to quarterly management sign off, periodic audit and risk assurance committee, executive leadership team and business team review
• an in-depth review of our risk management and assurance framework, building on the UK Government’s Orange Book and current best practice
• ongoing communication of the Risk Management and Assurance Framework and high levels of engagement at risk management workshops

Information assurance and cyber security

The Coal Authority does not hold top secret or secret information and the inherent information risk posed to government through the Coal Authority is relatively low.

The senior information risk owner (the chief finance and information officer) is a board member and ensures that proportionate controls are implemented to manage information risk in line with the board’s risk appetite.

Current global issues continue to lead to a heightened cyber security threat assessment by the National Cyber Security Centre.

We recognise that a positive cyber security culture is key to maintaining an effective defence.

Over the year we’ve continued to undertake a range of communications to improve information security awareness and improve our staff’s understanding of cyber risks through ongoing cyber awareness training, blogs and phishing campaigns to ensure that staff can recognise threats.

We have an appropriate risk assessment, information risk management and data protection policy and an information asset register.

We proactively monitor the threat landscape and promote awareness of threats to our supply chain.

We manage our overall information risk using appropriate technical controls, processes, procedures and training.

We continually improve our technical controls and a technical security strategy of strength through depth has been effective in trapping threats.

We’re not aware of any significant breaches of security or policy or loss of personal protected information during the year.

Risk assessment

Aligned to our 3 year business plan, we have identified the key threats and opportunities which could potentially impact achieving our objectives, and regularly discuss mitigation at an executive leadership team and board level.

Further explanation of the risks and control measures is provided in the strategic risks section of the performance report.

We do not attempt to eliminate risk but pursue opportunities to make a better future for people and the environment by ensuring risk is considered and managed.

Explicit reference to risk appetite allows us to adopt a common language across the Coal Authority and provides a framework for managers to confidently make risk based decisions.

5.8 Other considerations

Alexander tax review

The Coal Authority has complied with the Alexander tax review off-payroll procedures as per HM Treasury requirements to ensure any off- payroll staff are paying the appropriate income tax and national insurance.

MacPherson review (2013) of quality assurance

The Coal Authority does not currently operate any business critical analytical models as defined in the MacPherson review (2013).

Counter fraud (including anti-bribery, anti-corruption) and whistleblowing

We’re committed to creating a transparent environment and have a robust policy framework including clear policies for counter fraud (incorporating bribery and corruption) and whistleblowing.

Each policy provides guidance to staff and is part of the induction process.

These policies are reviewed on an annual basis for relevance and clarity, before being briefed to staff and published on our intranet.

Assessment of activity and feedback confirms that policies are well understood, effective and easy to use.

The board is particularly committed to ensuring that staff feel empowered, supported and protected should they need to raise any areas of concern.

Preventing modern slavery

We have updated our modern slavery statement and approach in relation to supporting the requirements of the Modern Slavery Act 2015.

5.9 Partner body review

During the year the Coal Authority has been subject to the first stage of a Cabinet Office arm’s length body review.

We look forward to the outcome being shared in due course.

5.10 Robust and continually improving control environment

As outlined in the performance report, our organisation is continuing to develop as we manage larger and more complex programmes of work to keep people safe, provide peace of mind and protect and enhance the environment.

Our business plan is ambitious and we will continue to evolve our organisation to make a better future for people and the environment in mining areas.

We are aware that in order to support this we need to continue to further develop our governance and controls.

During 2023 to 2024 we have continued to promote an even stronger risk management culture, further improved our counter fraud awareness and executed our action plan, and continued to strengthen cyber security controls.

In my last governance statement I highlighted a breach of a Cabinet Office digital spend control approval limit during 2022 to 2023 and the immediate action that the Coal Authority took to self-report this and identify actions to prevent reoccurrence.

In addition to this, during 2023 to 2024 we became aware of a mine water treatment scheme project with expenditure booked at £5.4 million as at 31 March 2023, above the £5 million delegated limit per project that required separate departmental approval.

We gained retrospective approval from the Department for Energy Security and Net Zero.

This project had been included in the overall mine water programme capital budget approved by the Department for Energy Security and Net Zero.

We believe these incidents to be isolated in the context of an overall strong control environment.

Notwithstanding this, to ensure the lessons learned from these incidents are fully embedded and that we develop our governance and controls at an appropriate pace, we set up a governance task and finish group to work over the last half of the year.

This group has identified quick wins to make our frameworks even more robust and easier for our people to understand and made some medium term recommendations to the executive leadership team and audit and risk assurance committee for ongoing improvements to our framework.

Ongoing work will include the further professionalisation of programme and project management as mentioned above and a continued strengthening of our contract assurance capability.

We realise that it is important to ensure that we are not complacent and we will continue to review and evolve our control environment to ensure that it stays proportionate and effective as the external environment and our organisation continue to change.

5.11 Effectiveness of control environment

The system of governance, risk management and control is designed to manage risk to a reasonable level rather than to eliminate all risk of failure to achieve policies, aims and objectives.

It can therefore only provide reasonable and not absolute assurance of effectiveness.

The system of internal control has been in place in the Coal Authority for the year ended 31 March 2024 and, as illustrated, up to the date of approval of the annual report and accounts, in accordance with HM Treasury guidance.

Based on all of the elements of the Coal Authority governance framework, I am satisfied that the Coal Authority’s governance, risk management and internal control arrangements are proportionate, fit for purpose and working as intended.

6. Remuneration and staff report

6.1 Introduction

This report has been prepared in accordance with the government’s financial reporting manual.

The report is made by the accounting officer on behalf of the board on the recommendations of the people and remuneration committee.

As part of the accountability report, the remuneration and staff report details key information relating to salaries and other payments, and any exit payments or other significant awards to current or former senior managers.

It also contains certain policies on pay, wider issues and statutory disclosure relating to such issues as fair pay and off-payroll engagements.

The following tables and sections within this report are subject to audit:

• non-executive directors’ remuneration
• executive directors’ remuneration
• executive directors’ pension entitlements
• average numbers of persons employed
• staff and related costs
• reporting of civil service and other compensation schemes
• pay multiples

6.2 The people and remuneration committee

As explained in the governance statement, the Coal Authority has an established people and remuneration committee.

This determines and keeps under review the pay and reward strategy for all staff of the Coal Authority and reviews the principles of the pay remit for submission to the Secretary of State for the Department for Energy Security and Net Zero.

The committee’s terms of reference prescribe that the chief executive shall not be present when their remuneration and conditions of employment are being considered.

6.3 Remuneration policy for the executive directors

The people and remuneration committee reviews and makes recommendations about the remuneration of the executive directors including the chief executive.

All executive pay is agreed within the framework of the senior civil servant pay remit guidance set by Cabinet Office.

6.4 The Trade Union (Facility Time Publication requirements)

Under the above regulations the Coal Authority is required to provide details of trade union time. For 2023 to 2024, there is no activity to report.

6.5 Staff turnover

36 employees left the organisation during the year, a percentage of 10.1%, compared to a percentage of 18.5% in 2022 to 2023.

We have seen a reduction in our turnover rate back to levels seen prior to the COVID-19 pandemic.

This is partly market driven but also a reflection of our focus on ensuring that the Coal Authority is a great place to work for everyone. More can be read about this in our people report.

6.6 Staff sickness absence

Overall average working days lost per staff year was 5.6, broadly in line with 2022 to 2023 at 5.9 days.

Colleagues who have extended periods of absence are supported in their return to work through occupational health assessments and the use of our employee assistance programme.

6.7 Performance development reviews

The executive directors participate in our performance development review process.

Individual assessments are made by the chief executive and reviewed by the chair and the people and remuneration committee.

The chief executive’s assessment is made by the chair and reviewed by the people and remuneration committee.

Appraisal of individual colleague performance is based on the achievement of defined objectives and behaviours assessed against 4 performance scores.

6.8 Performance-related pay

Performance-related pay is non-contractual and non-pensionable and is subject to obtaining annual approval via the pay remit process from the Department for Energy Security and Net Zero.

The pay remit for 2023 to 2024 was approved by the Department for Business, Energy and Industrial Strategy (the predecessor of the Department for Energy Security and Net Zero) in July 2023.

Performance-related pay is earned based on a corporate award so that it reflects both corporate and individual performance against objectives.

Corporate performance for 2023 to 2024 has been assessed by the board at 100% and performance-related pay has been awarded accordingly.

The following sections of the Remuneration and Staff Report are subject to audit.

6.9 Executive directors’ contracts

It’s our policy that executive directors should have employment contracts with an indefinite term providing for 6 months notice.

The details of the executive directors’ employment contracts are shown below:

	Date of continuous service	Notice entitlement to be given by the Coal Authority
Lisa Pinney MBE	1 June 2018	6 months
Paul Frammingham	6 May 2008	6 months
Carl Banton	5 January 2004	6 months

The notice period to be given by a director to the Coal Authority is: by the chief executive, 6 months, and by the remaining executive directors, 3 months.

6.10 Non-executive directors’ remuneration

Non-executive directors have been appointed by the Department for Business, Energy and Industrial Strategy or Department for Energy Security and Net Zero in line with the code of practice issued by the commissioner for public appointments.

Their terms of engagement and remuneration are determined by the Department for Energy Security and Net Zero.

They are not eligible to participate in the pension schemes or to receive performance-related pay.

The fees paid to the non-executive directors are shown below:

	Contract end date	2023 to 2024	2022 to 2023
Jeff Halliwell	31 March 2027	£27,050	£27,050
Steve Wilson	31 March 2024	£11,666	£11,666
Jayne Scott	31 March 2025	£11,666	£11,666
David Brooks	31 March 2025	£11,666	£1,944
Bev Smith	31 March 2026	£11,666	£845

Kate Denham was appointed in January 2024 and undertook induction activities during the period to March 2024. During this time she received remuneration of £2,917. Kate Denham’s formal tenure as a non-executive director began on 1 April 2024.

	Salary 2023 to 2024	Salary 2022 to 2023	Allowance 2023 to 2024	Allowance 2022 to 2023	Performance-related pay 2023 to 2024	Performance-related pay 2022 to 2023	Pension benefits 2023 to 2024[footnote 2]	Pension benefits 2022 to 2023	Total 2023 to 2024	Total 2022 to 2023
Lisa Pinney MBE	£145,000 to £150,000	£140,000 to £145,000	0	0	£15,000 to £20,000	£15,000 to £20,000	£58,000	£55,000	£220,000 to £225,000	£210,000 to £215,000
Paul Frammingham	£105,000 to £110,000	£95,000 to £100,000	£5,000 to £10,000	£10,000 to £15,000	£5,000 to £10,000	£5,000 to £10,000	£41,000	£40,000	£160,000 to £165,000	£155,000 to £160,000
Carl Banton[footnote 3]	£85,000 to £90,000	£80,000 to £85,000	£5,000 to £10,000	£5,000 to £10,000	£5,000 to £10,000	£5,000 to £10,000	£56,000	(£21,000)	£160,000 to £165,000	£75,000 to £80,000

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 decrease due to a transfer of pension rights.

Executive directors’ remuneration includes salary, non-consolidated performance related pay earned in the year under the performance development review process (non-contractual), certain allowances and the value of pension benefits accrued during the year.

Allowances include a car allowance in both years and a responsibility allowance in 2022 to 2023 only for Paul Frammingham, and a responsibility allowance in both years for Carl Banton.

Performance-related pay is based on performance levels attained and is made as part of the performance review process.

Performance-related pay relates to the performance in the year in which it becomes payable to the individual.

We also participate in an HMRC-approved cycle to work scheme. Carl Banton participated in this scheme during 2022 to 2023 and Lisa Pinney participated in this scheme during 2022 to 2023 and 2023 to 2024.

No executive directors received any benefits in kind during 2022 to 2023 or 2023 to 2024.

6.11 Executive directors’ pension entitlements

	Accrued pension at pension age at 31 March 2024	Real increase in pension and related lump sum at pension age	Cash equivalent transfer value at 31 March 2024	Cash equivalent transfer value at 31 March 2023	Real increase in cash equivalent transfer value
Lisa Pinney MBE	£20,000 to £25,000	£ 2,500 to £5,000	£286,000	£215,000	£35,000
Paul Frammingham	£35,000 to £40,000	£0 to £2,500	£753,000	£645,000	£28,000
Carl Banton	£35,000 to £40,000	£2,500 to £5,000	£759,000	£647,000	£50,000

6.12 Civil Service pensions

Pension benefits are provided through the Civil Service pension arrangements. Before 1 April 2015, the only scheme was the PCSPS, which is divided into a few different sections – classic, premium, and classic plus provide benefits on a final salary basis, while nuvos provides benefits on a career average basis.

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.

All newly appointed civil servants, and the majority of those already in service, joined the new scheme.

The PCSPS and alpha are unfunded statutory schemes. Employees and employers make contributions (employee contributions range between 4.6% and 8.05%, depending on salary).

The balance of the cost of benefits in payment is met by monies voted by Parliament each year.

Pensions in payment are increased annually in line with the Pensions Increase legislation. Instead of the defined benefit arrangements, employees may opt for a defined contribution pension with an employer contribution, the partnership pension account.

In alpha, pension builds up at a rate of 2.32% of pensionable earnings each year, and the total amount accrued is adjusted annually in line with a rate set by HM Treasury.

Members may opt to give up (commute) pension for a lump sum up to the limits set by the Finance Act 2004.

All members who switched to alpha from the PCSPS had 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 accrued pensions shown in this report are the pension the member is entitled to receive when they reach normal pension age, or immediately on ceasing to be an active member of the scheme if they are already at or over normal pension age.

Normal 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 in this report show pension earned in PCSPS or alpha – as appropriate. Where a member has benefits in both the PCSPS and alpha, the figures show the combined value of their benefits in the two schemes but note that the constituent parts of that pension may be payable from different ages.

When the Government introduced new public service pension schemes in 2015, there were transitional arrangements which treated existing scheme members differently based on their age.

Older members of the PCSPS remained in that scheme, rather than moving to alpha. In 2018, the Court of Appeal found that the transitional arrangements in the public service pension schemes unlawfully discriminated against younger members.

As a result, steps are being taken to remedy those 2015 reforms, making the pension scheme provisions fair to all members.

The public service pensions remedy is made up of 2 parts.

The first part closed the PCSPS on 31 March 2022, with all active members becoming members of alpha from 1 April 2022.

The second part removes the age discrimination for the remedy period, between 1 April 2015 and 31 March 2022, by moving the membership of eligible members during this period back into the PCSPS on 1 October 2023. This is known as “rollback”.

For members who are in scope of the public service pension remedy, the calculation of their benefits for the purpose of calculating their cash equivalent transfer value and their single total figure of remuneration, as of 31 March 2023 and 31 March 2024, reflects the fact that membership between 1 April 2015 and 31 March 2022 has been rolled back into the PCSPS.

Although members will in due course get an option to decide whether that period should count towards PCSPS or alpha benefits, the figures show the rolled back position, meaning PCSPS benefits for that period.

The partnership pension account is an occupational defined contribution pension arrangement which is part of the Legal & General Mastertrust.

The employer makes a basic contribution of between 8% and 14.75% (depending on the age of the member). The employee does not have to contribute but, where they do make contributions, the employer will match these up to a limit of 3% of pensionable salary (in addition to the employer’s basic contribution).

Employers also contribute a further 0.5% of pensionable salary to cover the cost of centrally provided risk benefit cover (death in service and ill health retirement).

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

For 2023 to 2024, employers’ contributions of £4,083,000 were payable to the PCSPS (2022 to 2023: £3,508,000) at one of four rates in the range 26.6% to 30.3% of pensionable pay, based on salary bands (2022 to 2023: 26.6% to 30.3%).

The scheme actuary reviews employer contributions every 4 years following a full scheme valuation.

The salary bands and contribution rates were revised for 2019 to 2020 and will remain unchanged until 2024 to 2025.

The contribution rates reflect benefits as they are accrued, not when the costs are actually incurred, and reflect past experience of the scheme.

Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employer contributions of £48,876 (2022 to 2023: £42,292) were paid in respect of 10 (2022 to 2023: 10) employees enrolled in partnership accounts in the year.

6.13 Cash equivalent transfer value

A cash equivalent transfer value 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 cash equivalent transfer value 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.

6.14 Real increase in cash equivalent transfer value

This reflects the increase in cash equivalent transfer value 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.

There were no early retirements on ill health grounds in either 2022 to 2023 or 2023 to 2024.

The following table shows the average full time equivalent persons employed by the Coal Authority throughout 2023 to 24 and is consistent with the organisational structure for both years.

It reflects continued growth in the Coal Authority’s operational programmes and externally funded work.

6.15 Average number of persons employed 2023 to 2024

Department	Staff	Other	Total
Development and information	49	8	57
Operations	122	16	138
Commercial and innovation	29	2	31
Digital and information technology	37	5	42
Corporate management and services	77	7	84
Staff numbers	314	38	352

7.8 full-time equivalent persons were charged to capital projects during 2023 to 2024

6.16 Average number of persons employed 2022 to 2023

Department	Staff	Other	Total
Development and information	62	2	64
Operations	114	2	116
Commercial and innovation	40	1	41
Digital and information technology	33	4	37
Corporate management and services	62	2	64
Staff numbers	311	11	322

9.1 full-time equivalent persons were charged to capital projects during 2022 to 2023

6.17 Staff and related costs 2023 to 2024

Staff costs comprise	Staff	Other	Total
Wages and salaries	£16,395,000	£0	£16,395,000
Social security costs	£1,863,000	£0	£1,863,000
Other pension costs	£4,064,000	£0	£4,064,000
Agency staff costs	£0	£769,000	£769,000
Total staff costs	£22,322,000	£769,000	£23,091,000

6.18 Staff and related costs 2022 to 2023

Staff costs comprise	Staff	Other	Total
Wages and salaries	£13,717,000	£0	£13,717,000
Social security costs	£1,636,000	£0	£1,636,000
Other pension costs	£3,508,000	£0	£3,508,000
Agency staff costs	£0	£1,004,000	£1,004,000
Total staff costs	£18,861,000	£1,004,000	£19,865,000

6.19 Staff composition

As at 31 March 2024	Non-executive directors	Executive leadership team	Senior managers	Staff	Total
Male	3	5	13	192	213
Female	2	2	9	167	180
Total	5	7	22	359	393

As at 31 March 2024, Kate Denham received remuneration. However, her formal role as a non-executive director did not start until 1 April 2024, therefore she has not been included in the figures above.

6.20 Disability, diversity and inclusion

We’re an inclusive employer and actively encourage and welcome applications from everyone who might have the right skills to help us make a better future for people and the environment in mining areas.

We offer a guaranteed interview scheme for under-represented ethnically diverse groups and disabled applicants and continually work to embed best practice and remove bias from our recruitment practices.

We provide reasonable adjustments for disabled and differently abled candidates at interview and help them succeed at work.

We encourage flexible working, part time and compressed hours and term-based hours.

We have an equality, diversity and inclusion plan and an anti-racism plan which focus on practical steps to help us be even better and we continue to listen and learn.

We champion the career development, career progression and retention of all our employees.

We have encouraged and supported a range of diversity networks and we work to ensure that a wide variety of voices can be heard at all levels of the organisation.

We continue to work to attract, recruit and retain greater diversity in staff at all levels and to develop them through the organisation.

We continue to encourage everyone to feel comfortable to confidentially self-disclose diversity data to improve the accuracy of our reporting and enable us to put clear actions in place.

We want to be a truly diverse and inclusive organisation – a truly ‘great place to work for everyone’. We know we have more to do and are committed to continuing to improve and grow.

Further information about our diversity and inclusion work can be seen in the our people section of the performance report

6.21 Reporting of civil service and other compensation schemes – exit packages

2023 to 2024 (2022 to 2023 in brackets)	Number of compulsory redundancies	Number of other departures agreed	Total number of exit packages
Less than £10,000	0 (0)	0 (0)	0 (0)
£10,000 to £25,000	0 (0)	0 (1)	0 (0)
£25,000 to £50,000	0 (0)	0 (1)	0 (0)
£50,000 to £100,000	0 (0)	0 (0)	0 (0)
Total number of exit packages	0 (0)	0 (2)	0 (0)
Total cost	0 (0)	0 (£60,000 to £65,000)	0 (0)

There were no departures agreed during 2023 to 2024. In 2022 to 2023 there were 2 departures at a cost of £60,000 to £65,000.

Exit costs are accounted for in the year of departure and awards are determined in accordance with the provisions of the Civil Service Compensation scheme, a statutory scheme made under the Superannuation Act 1972.

6.22 Reporting of high paid off-payroll appointments

There were 7 highly paid off-payroll worker engagements as at 31 March 2024, earning £245 per day or greater.

Length of employment	Number
Less than 1 year	3
Between 1 and 2 years	3
Between 2 and 3 years	1
Between 3 and 4 years	0
4 or more years	0

There were 11 highly paid off-payroll workers engaged at any point during the year ended 31 March 2024, earning £245 per day or greater. None of them were subject to off-payroll legislation.

The Coal Authority routinely performs checks on proposed roles, including HMRC’s Employment Status Service tests, to determine IR35 status prior to any offer.

Where these checks suggest that assurance as to income tax and national insurance obligations is required, contracts include the above mentioned clauses and assurance is requested from either the worker or the agent through whom they work.

There were no off-payroll engagements of board members and/or senior officials with significant financial responsibility between 1 April 2023 and 31 March 2024.

There were 11 individuals that have been deemed board members and/or senior officials with significant financial responsibility during the financial year. This figure includes both off-payroll and on-payroll engagements

Consultancy expenditure for the year was £0. Consultancy expenditure for 2022 to 2023 was also £0.

6.23 Pay multiples

The percentage change from the previous financial year for salary and allowances as well as performance-related pay of the highest paid director and the employees of the Coal Authority are:

Salary and Allowances	2023 to 2024	2022 to 2023
Highest paid director (mid-point of band)	3.5%	3.6%
Employees of the Coal Authority	5.8%	4.9%

Performance related pay	2023 to 2024	2022 to 2023
Highest paid director (mid-point of band)	0%	0%
Employees of the Coal Authority	1.4%	5.4%

In 2023 to 2024 average employee salary and allowances increased by 5.8%. This included a pay award which averaged 5% across all levels in the organisation and a one-off cost of living payment for all staff grades below executive level of £1,500.

Performance-related pay is linked to the achievement of organisational performance targets, which were met in full during 2023 to 2024.

Average increase in performance related pay for 2023 to 2024 was slightly less compared with prior year due to an increase in the numbers of staff eligible for the payment.

The performance-related pay for the highest paid director is capped.

The ratio of the highest paid director’s remuneration to that of the employee at the 3 quartiles is as below:

Year	25th percentile	Median	75th percentile
2023 to 2024	4.6	3.5	3
2022 to 2023	4.7	3.5	2.9

Total remuneration includes salary, allowances and non-consolidated performance-related pay.

It does not include severance payments, employer pension contributions or the cash equivalent transfer value of pensions.

The figures upon which these calculations are based are:

Year	25th percentile total pay and benefits	25th percentile salary	Median total pay and benefits	Median salary	75th percentile total pay and benefits	75th percentile salary
2023 to 2024	£36,219	£34,072	£47,641	£47,474	£56,334	£51,738
2022 to 2023	£33,368	£30,861	£44,486	£41,224	£54,223	£52,531

In 2023 to 2024 and 2022 to 2023, no employee received remuneration in excess of the highest paid director. Remuneration ranged from £20,058 to £170,000. In 2022 to 2023 it was £19,968 to £160,000.

7. Parliamentary accountability and audit report

As part of the accountability report, the parliamentary accountability and audit report sets out those additional disclosures required by Parliament, if not detailed elsewhere in the annual report and accounts, and contains the external audit report.

7.1 Government Functional Standards

The Coal Authority complies with the adoption of government functional standards, whilst ensuring they meet business needs and priorities

The following sections are subject to audit.

7.2 Regularity of expenditure: losses, special payments and gifts

There have been no losses or special payments in excess of £300,000, or any gifts during 2023 to 2024.

7.3 Fees and charges

The Coal Authority complies with the cost allocation and charging requirements set out in HM Treasury’s Managing Public Money.

The Coal Authority’s most significant income streams, as outlined at notes 2 and 4 of the financial statements, are explained below.

Commercial and innovation operating segment includes the provision of advisory and technical services which generated income of £8,117,000 (2022 to 2023: £6,802,000), costs of £7,773,000 (2022 to 2023: £6,639,000) and a surplus of £344,000 (2022 to 2023: £163,000 surplus).

The financial objective for the provision of advisory and technical services is either full cost recovery (including an allowance for overhead recovery) when providing services across government, or commercial rates, which reflect the increased levels of risk, when providing services into competitive markets.

The proportion of income as a result of full cost recovery is in excess of 97% (2022 to 2023: 99%), reflecting the continued provision of services to our customers across government as we support them in the delivery of key programmes.

Commercial and innovation operating segment includes the provision of mining reports which generated income of £6,623,000 (2022 to 2023: £6,980,000), costs of £2,855,000 (2022 to 2023: £3,175,000) and a surplus of £3,768,000 (2022 to 2023: £3,805,000 surplus).

Expenditure associated with specific programmes and activities is managed and reported under the operations segment, but relates to the enhancement of data and information.

The financial objective for mining reports is to provide services at a commercial rate.

Development and information operating segment includes the provision of data licensing and mining information which generated income of £1,743,000 (2022 to 2023: £1,593,000), internal recharges of £1,426,000 (2022 to 2023: £1,610,000), costs of £3,075,000 (2022 to 2023: £3,144,000) and a surplus of £94,000 (2022 to 2023: £59,000 surplus).

The financial objective for the provision of data licensing and mining information is full cost recovery (including an allowance for overhead recovery).

Development and information includes the provision of licensing and permissions activities which generated income of £745,000 (2022 to 2023: £784,000), costs of £1,059,000 (2022 to 2023: £974,000) and a deficit of £314,000 (2022 to 2023: £190,000 deficit).

The financial objective for the provision of licensing and permissions services is full cost recovery plus an allowance for overhead recovery.

7.4 Remote contingent liabilities

Remote contingent liabilities are not required to be disclosed under International Accounting Standard (IAS) 37, but are considered here for parliamentary reporting and accountability purposes. The Coal Authority believes that sufficient disclosure is available in the financial statements, in note 16 contingent liabilities and note 13 provisions, to give the reader a full understanding of the liabilities it faces and may face.

7.5 Going concern

This report has been created on the basis of the Coal Authority being a going concern as detailed in note 1.3 of the financial statements.

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

Lisa Pinney MBE, Chief Executive and Accounting Officer, 15 July 2024

8. The Certificate and Report of the Comptroller and Auditor General to the House of Commons

8.1 Opinion on financial statements

I certify that I have audited the financial statements of the Coal Authority for the year ended 31 March 2024 under the Coal Industry Act 1994.

The financial statements comprise the Coal Authority’s:

• statement of financial position as at 31 March 2024
• statement of comprehensive net expenditure, statement of cash flows and statement of changes in taxpayers’ equity for the year then ended
• the related notes, including the significant accounting policies

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

In my opinion, the financial statements:

• give a true and fair view of the state of the Coal Authority’s affairs as at 31 March 2024 and its net income for the year then ended
• have been properly prepared in accordance with the Coal Industry Act and Secretary of State directions issued thereunder.

8.2 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.

8.3 Basis for opinions

I conducted my audit in accordance with International Standards on Auditing (UK) (ISAs UK), applicable law and Practice Note 10 Audit of Financial Statements and Regularity of Public Sector Bodies in the United Kingdom (2022).

My responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of my certificate.

Those standards require me and my staff to comply with the Financial Reporting Council’s Revised Ethical Standard 2019.

I am independent of the Coal Authority in accordance with the ethical requirements that are relevant to my audit of the financial statements in the UK.

My staff and I have fulfilled our other ethical responsibilities in accordance with these requirements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

8.4 Emphasis of Matter

I draw attention to the disclosures made in notes 1.20 and 13 of the financial statements concerning the uncertainties inherent in the provisions of mine water schemes, public safety and subsidence claims and subsidence pumping stations, totalling £1,556 million as at 31 March 2024 (2023: £2,127 million).

As set out in these notes, given the long-term nature of these liabilities and the number and nature of the assumptions on which the estimates of the provisions are based, management has needed to make significant judgements in estimating the provisions and a considerable degree of uncertainty remains over the value of the liabilities.

Significant changes to the liabilities could occur as a result of subsequent information and events that are different from the current assumptions adopted by the Coal Authority. My opinion is not modified in respect of this matter.

8.5 Conclusions relating to going concern

In auditing the financial statements, I have concluded that the Coal Authority’s use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

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

8.6 Other Information

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

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

My responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

If I identify such material inconsistencies or apparent material misstatements, I am required to determine whether this gives rise to a material misstatement in the financial statements themselves.

If, based on the work I have performed, I conclude that there is a material misstatement of this other information, I am required to report that fact.

I have nothing to report in this regard.

8.7 Opinion on other matters

In my opinion the part of the remuneration and staff report to be audited has been properly prepared in accordance with Secretary of State directions issued under the Coal Industry Act 1994.

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

• the parts of the Accountability Report subject to audit have been properly prepared in accordance with Secretary of State directions made under the Coal Industry Act 1994
• the information given in the Performance and Accountability Reports for the financial year for which the financial statements are prepared is consistent with the financial statements and is in accordance with the applicable legal requirements

8.8 Matters on which I report by exception

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

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

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

8.9 Responsibilities of the Accounting Officer for the financial statements

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

• maintaining proper accounting records
• providing the comptroller and auditor general with access to all information of which management is aware that is relevant to the preparation of the financial statements such as records, documentation and other matters
• providing the comptroller and auditor general with additional information and explanations needed for his audit;
• providing the comptroller and auditor general with unrestricted access to persons within the Coal Authority from whom the auditor determines it necessary to obtain audit evidence
• ensuring such internal controls are in place as deemed necessary to enable the preparation of financial statements to be free from material misstatement, whether due to fraud or error
• preparing financial statements which give a true and fair view in accordance with Secretary of State directions issued under the Coal Industry Act 1994
• preparing the annual report, which includes the remuneration and staff report, in accordance with Secretary of State and directions issued under the Coal Industry Act 1994
• assessing the Coal Authority’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Accounting Officer anticipates that the services provided by the Coal Authority will not continue to be provided in the future

8.10 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 Coal Industry Act 1994.

My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a certificate that includes my opinion.

Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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

I design procedures in line with my responsibilities, outlined above, to detect material misstatements in respect of non-compliance with laws and regulations, including fraud.

The extent to which my procedures are capable of detecting non-compliance with laws and regulations, including fraud is detailed below.

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

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

• considered the nature of the sector, control environment and operational performance including the design of the Coal Authority’s accounting policies
• inquired of management, the Coal Authority’s head of internal audit and those charged with governance, including obtaining and reviewing supporting documentation relating to the Coal Authority’s policies and procedures on:
  • identifying, evaluating and complying with laws and regulations
  • detecting and responding to the risks of fraud
  • the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations including the Coal Authority’s controls relating to the Coal Authority’s compliance with the Coal Industry Act 1994 and Managing Public Money
• inquired of management, the Coal Authority’s head of internal audit and those charged with governance whether:
  • they were aware of any instances of non- compliance with laws and regulations
  • they had knowledge of any actual, suspected, or alleged fraud
• discussed with the engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud

As a result of these procedures, I considered the opportunities and incentives that may exist within the Coal Authority for fraud and identified the greatest potential for fraud in the following areas:

• revenue recognition
• posting of unusual journals
• complex transactions
• bias in management estimates

In common with all audits under ISAs (UK), I am required to perform specific procedures to respond to the risk of management override.

I obtained an understanding of the Coal Authority’s framework of authority and other legal and regulatory frameworks in which the Coal Authority operates.

I focused on those laws and regulations that had a direct effect on material amounts and disclosures in the financial statements or that had a fundamental effect on the operations of the Coal Authority.

The key laws and regulations I considered in this context included the Coal Industry Act, Managing Public Money, and relevant employment law, pensions and tax legislation.

8.13 Audit response to identified risk

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

• I reviewed the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described above as having direct effect on the financial statements
• I enquired of management and the audit and risk assurance committee concerning actual and potential litigation and claims
• I reviewed minutes of meetings of those charged with governance and the board and internal audit reports
• I addressed the risk of fraud through management override of controls by:
  • testing the appropriateness of journal entries and other adjustments
  • assessing whether the judgements on estimates are indicative of a potential bias
  • evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business

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

A further description of my responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website.

This description forms part of my certificate.

8.14 Other auditor’s responsibilities

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

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

8.15 Report

I have no observations to make on these financial statements.

Gareth Davies, Comptroller and Auditor General, 17 July 2024.

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

1. Not a member of this committee ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸ ↩⁹ ↩¹⁰ ↩¹¹ ↩¹² ↩¹³ ↩¹⁴ ↩¹⁵ ↩¹⁶ ↩¹⁷ ↩¹⁸ ↩¹⁹ ↩²⁰ ↩²¹ ↩²² ↩²³ ↩²⁴ ↩²⁵ ↩²⁶

2. The pension benefits of any members affected by the public service pensions remedy which were reported in 2022 to 2023 on the basis of alpha membership for the period between 1 April 2015 and 31 March 2022 are reported in 2023 to 2024 on the basis of PCSPS membership for the same period. ↩

3. During 2022 to 2023, Carl Banton transitioned from a final salary pension scheme to alpha pension scheme. Where the change in pension (normally an increase year on year) is insufficient to offset the inflationary increase, in real terms, the pension value reduces, resulting in the negative value above. ↩