Accounts
for the year ended 31 March 2007

Notes to the Accounts

1 Statement of accounting policies

1.1 Accounting convention

These accounts have been prepared in accordance with an Accounts Direction issued by the Secretary of State for Constitutional Affairs, with the approval of the Treasury, in accordance with paragraph (10)(1)(b) of Schedule 5 to the Data Protection Act 1998

These accounts shall give a true and fair view of the income and expenditure, and cashflows, for the financial year, and state of affairs at the year-end. The accounts are prepared in accordance with The Government Financial Reporting Manual for 2006-07 and other guidance which the Treasury has issued in respect of accounts which are required to give a true and fair view, except where agreed otherwise with the Treasury, in which case the exception is described in the notes to the accounts.

These accounts have been prepared under the historical cost convention, as modified by the inclusion of fixed assets at current cost. The accounts meet the accounting and disclosure requirements of the Companies Act 1985 and the accounting standards issued or adopted by the Accounting Standards Board to the extent that those requirements are appropriate.

Going concern

These accounts have been prepared on a going concern basis. For non-trading entities in the public sector, the anticipated continuation of the provision of a service in the future, as evidenced by the inclusion of financial provision for that service in published documents is normally sufficient evidence of going concern. The Government Financial Reporting Manual states sponsored entities whose balance sheet show total net liabilities should prepare their financial statements on the going concern basis unless, after discussion with their sponsors, the going concern basis is deemed inappropriate.

1.2 Grant-in-aid

Grant-in-aid is received from the Department for Constitutional Affairs to fund expenditure on freedom of information responsibilities, and is credited to the income and expenditure reserve upon receipt.

The prior year adjustment (note 18) relates to a change in accounting policy for grant-in-aid under the Government Financial Reporting Manual (FReM), which now requires grant-in-aid to be taken direct to the Income and Expenditure Reserve rather than via the Income and Expenditure Account.

1.3 Fee income

Fee income is received from notifications made under the Data Protection Act 1998, and is retained as operating income.

The notification is paid in advance for a period of one year, and a proportion of this income is therefore deferred and released back to the Income and Expenditure Account over the fee period.

1.4 Tangible fixed assets

Assets are capitalised as fixed assets if they are intended for use on a continuous basis, and their original purchase cost, on an individual basis, is £2,000 or more. Fixed assets (excluding assets under construction) are valued at net current replacement cost by using appropriate indices published by National Statistics, when the effect of re-valuing assets over time is material.

1.5 Depreciation

Depreciation is provided on all fixed assets on a straight-line basis to write off the cost or valuation evenly over the asset’s anticipated life. A full year’s depreciation is charged in the year in which an asset is brought into use. No depreciation is charged in the year of disposal.

The principal rates adopted are:
Leasehold improvements over the remaining life of the lease
Equipment and furniture     5-10 years
Information technology       5 years
Assets under construction nil

1.6 Stock

Stocks of stationery and other consumable stores are not considered material and are written off to the Income and Expenditure Account as they are purchased.

1.7 Notional charges

A notional charge reflecting the cost of capital employed in the year is included in the Income and Expenditure Account along with an equivalent reversing notional income to finance the charge. The charge is calculated using the Treasury’s discount rate of 3.5% applied to the mean value of capital employed during the year.

1.8 Salary of the Information Commissioner

The salary and pension entitlements of the Information Commissioner are paid directly from the Consolidated Fund as a standing charge, and is included within Staff costs and also as a credit to the Income and Expenditure reserve.

1.9 Pension contributions

Pension contributions are charged to the Income and Expenditure in the year of payment.

1.10 Operating leases

Amounts payable under operating leases are charged to the Income and Expenditure Account on a straight-line basis over the lease term, even if these payments are not made on such a basis.

1.11 Value added tax

Most activities of the Information Commissioner are outside of the scope of VAT. Irrecoverable VAT is charged to the relevant expenditure category, or included in the capitalised purchase cost of fixed assets. Where output tax is charged or input tax is recoverable the amounts are stated net of VAT.

2 Operating income

Fees collected under the Data Protection Act 1998

	2006/07 £	2005/06 RESTATED £
Deferred income at 1 April 2006	5,207,000	4,973,265
Fee receipts	10,204,761	9,655,060
Deferred income at 31 March 2007	(5,513,709)	(5,207,000)
	9,898,052	9,421,325

Comparatives have been re-stated as explained in note 18

3 Other income

Other income is appropriated-in-aid to the Department for Constitutional Affairs

	2006/07 £	2005/06 £
Legal fees recovered	12,333	9,106
Travel expenses recovered	13,781	5,346
Other	108	400
	26,222	14,852

4 Staff costs

Staff costs were:

	2006/07 £	2005/06 £
Wages and salaries	6,816,118	5,834,519
Social security costs	440,767	390,374
Other pension costs	1,096,940	933,941
	8,353,825	7,158,834
	Number	Number
Staff with a permanent UK employment contract with the Information Commissioner	243	230
Other staff engaged on the objectives of the Information Commissioner	19	15
	262	245

The salary and pension entitlements of the Information Commissioner are paid directly from the Consolidated Fund as a standing charge. Included in staff costs above are costs of £132,909 (2005/06: £130,573).

The Principal Civil Service Pension Scheme (PCSPS) is an unfunded multi-employer defined benefit scheme. The Information Commissioner is unable to identify its share of the underlying assets and liabilities. The Scheme Actuary (Hewitt Bacon Woodrow) valued the scheme as at 31 March 2003. You can find details in the resource accounts of the Cabinet Office: Civil Superannuation (www.civil service-pensions.gov.uk).

For 2006/07, employer contributions of £1,087,058 were payable to the PCSPS (2005/06: £927,103) at one of four rates in the range 17.1 to 25.5 per cent of pensionable pay, based on the salary bands (the rates in 2005/06 were between 16.2 and 24.6 per cent). The Scheme Actuary reviews employer contributions every four years following a full scheme valuation. From 2007/2008 salary bands will be revised; however the rates will remain the same.

The contribution rates are set to meet the cost of the benefits accruing during 2006/07 to be paid when the member retires, and not the benefits paid during this period to existing pensioners.

Employees can opt to open a partnership pension account, a stakeholder pension with an employer contribution. Employer’s contributions of £9,213 (2005/06: £6,483) were paid to one or more of a panel of three appointed stakeholder pension providers. Employer’s contributions are age-related and range from 3 to 12.5 per cent of pensionable pay. Employers also match employee contributions up to 3 per cent of pensionable pay. In addition, employer’s contributions of £669 (2005/06: £355), 0.8 per cent of pensionable pay, were payable to the PCSPS to cover the cost of the future provision of lump sum benefits on death in service and ill health retirement of these employees.

No contributions were due or prepaid to partnership providers at the balance sheet date.

No individuals retired early on health grounds during the year.

5 Other operating costs

	2006/07 £	2005/06 £
Accommodation (rent, rates and services)	1,126,717	1,085,000
Office supplies, printing and stationery	206,349	291,490
Carriage and telecommunications	107,231	115,388
Travel, subsistence and hospitality	435,968	416,213
Staff recruitment	142,799	183,671
Specialist assistance, consultancy and policy research	558,692	476,988
Communications and external relations	1,861,782	1,343,110
Legal costs	290,449	155,528
Staff training, health and safety	378,314	392,061
Information services	1,797,544	1,787,349
Vehicle expenses	1,606	1,300
Audit fee	21,000	20,000
	6,928,451	6,268,098

Included above are operating lease payments for land and buildings of £606,060 (2005/06: £573,141)

6 Appropriations

	2006/07 £	2005/06 £
(accruals terms)
Interest received	53,115	50,250
Other income	26,222	14,852
Prepaid appropriations at 31 March 2006	-	4,973,266
Appropriations due per Income and Expenditure account	79,337	5,038,368
(cash terms)
Interest receivable	53,115	50,250
Other income	26,222	14,852
Fee receipts	-	128,801
Appropriations made per Cashflow Statement	79,337	193,903

8 Debtors

	31 March 2007 £	31 March 2006 £
Other debtors	14,146	30,655
Prepayment	500,017	486,765
	514,163	517,420
Split:
Other Central Government bodies	-	19,696
Bodies external to Government	514,163	497,724
	514,163	517,420

9 Cash at bank and in hand

	31 March 2007 £	31 March 2006 £
Balance at 1 April	380,894	231,092
Increase in cash	91,330	149,802
Balance 31 March	472,224	380,894
Split:
Commercial banks	470,421	379,649
Cash in hand	1,803	1,245
	472,224	380,894

10 Creditors; amounts falling due within one year

	31 March 2007 £	31 March 2006 £
Other taxes and social security	2,611	2,005
Trade creditors	171,883	67,513
Other creditors	32,220	27,548
Accruals and deferred fee income	5,723,157	5,340,146
	5,929,871	5,437,212
Split:
Other Central Government bodies	81,306	29,612
Bodies external to Government	5,848,565	5,407,600
	5,929,871	5,437,212

12 Reconciliation of operating surplus to net cash inflow from operations

	2006/07 £	2005/06 £
Operating deficit for the year	(7,413,687)	(6,462,976)
Depreciation charged in the year	2,050,724	1,910,033
Loss on disposal of assets	-	6,410
Loss on revaluation of fixed assets	4,961	555,778
Consolidated fund standing charge - Information Commissioner’s salary	132,909	130,573
Reduction/(Increase) in debtors relating to operating activities	3,257	(90,929)
Increase in creditors relating to operating activities	492,659	155,085
Net cash outflow from operating activities	(4,729,177)	(3,796,026)

13 Commitments under operating leases

	31 March 2007 £	31 March 2006 £
Land and buildings
Expiry within 1 year	-	3,584
Expiry within 2 to 5 years	-	-
Expiry thereafter	530,381	502,364
	530,381	505,948

The leases of land and buildings are subject to periodic rent reviews.

14 Capital commitments

There were no capital commitments outstanding at 31 March 2007 (31 March 2006: £nil).

15 Related party transactions

The Information Commissioner confirms that he had no personal or business interests which conflict with his responsibilities as Information Commissioner.

The Department for Constitutional Affairs is a related party to the Information Commissioner. During the year no related party transactions were entered into, with the exception of providing the Information Commissioner with grant-in-aid and the appropriation-in-aid of sundry receipts.

In addition the Information Commissioner has had various material transactions with other Central Government bodies. These transactions have been with the Central Office of Information (COI) and the Home Office Pay and Pensions Service (HOPPS).

None of the key managerial staff or other related parties has undertaken any material transactions with the Information Commissioner during the year.

16 Financial instruments

Financial Reporting Standard 13, Derivative and other Financial Instruments: Disclosures, requires disclosure of the role which financial instruments have had during the year in creating or changing the risks an entity faces in undertaking its activities. Because of the non-trading nature of its activities and the way in which central government sector entities are financed, the Information Commissioner is not exposed to the degree of financial risk faced by business entities.

Moreover, financial instruments play a much more limited role in creating or changing risk than would be typical of the listed companies to which Financial Reporting Standard 13 mainly applies. The Information Commissioner has no powers to invest surplus funds and may only borrow with the prior approval of the Secretary of State for Constitutional Affairs.

Financial assets and liabilities are generated by day-to-day operational activities and are not held to change the risks facing the Information Commissioner in undertaking his activities.

As permitted by Financial Reporting Standard 13, debtors and creditors which mature or become payable within 12 months from the balance sheet date have been omitted from the currency profile.

Liquidity risk

The Information Commissioner’s funding is provided by fee income and grant-in-aid voted annually by Parliament within the Supply Estimate of the Department for Constitutional Affairs. It is not, therefore, exposed to significant liquidity risks.

Interest rate risk

The Information Commissioner is not exposed to any interest rate risk.

Foreign currency risk

The Information Commissioner’s foreign currency transactions are not significant.

17 Accountability

No exceptional kinds of expenditure such as losses and special payments that required separate disclosure because of their nature or amount were incurred.

18 Prior year adjustment

There has been a change in accounting treatment as a result of the revision of The Government Financial Reporting Manual for 2006/07 (the FReM).

Grant-in-aid received for revenue purposes should now be regarded as a financing flow, and no longer as income, and should thus be credited directly to the income and expenditure reserve.

Grant-in-aid is provided to finance the activities of the Information Commissioner and enable him to meet his freedom of information statutory and other obligations, including capital spending, and as such should now be credited directly to the income and expenditure reserve, and not released to the income and expenditure account.

This change of policy has necessitated a re-statement of the prior year. The effect of the prior year adjustment is:

Income and expenditure account

	2005/06 £
Operating Income
As previously reported	15,983,027
Prior year adjustment	(6,561,702)
As re-stated	9,421,325

Cashflow statement

	2005/06 £
Net cashflow from operating activities
As previously reported	293,455
Prior year adjustment	(4,089,481
As re-stated	(3,796,026)
Financing
As previously reported	1,010,519
Prior year adjustment	4,089,481
As re-stated	5,100,000

19 Post balance sheet events

On the 9 May 2007 the responsibilities of the sponsoring body, the Department for Constitutional Affairs, were transferred to the new Ministry of Justice.

The Annual Report, including the financial statements was authorised for issue on 10 July 2007, by Richard Thomas, Information Commissioner.

20 Resources by function

Data protection

The Secretary of State for Constitutional Affairs has directed that the notification fees collected by the Information Commissioner under the Data Protection Act 1998 shall be retained by the Information Commissioner to fund his expenditure on data protection work.

The annual fee for notification is £35, and has remained unchanged since it was introduced on 1 March 2000.

The data protection notification fee is set by the Secretary of State, and in making any fee regulations under section 26 of the Data Protection Act 1998, as amended by paragraph 17 of Schedule 2 to the Freedom of Information Act 2000, he shall have regard to the desirability of securing that the fees payable to the Information Commissioner are sufficient to offset the expenses incurred by the Information Commissioner, the Information Tribunal and any expenses of the Secretary of State in respect of the Commissioner or the Tribunal, and any prior deficits incurred, so far as attributable to the functions under the Data Protection Act 1998.

These accounts do not include the expenses incurred by the Information Tribunal, or the expenses incurred by the Secretary of State in respect of the Information Commissioner, and therefore these accounts cannot be used to demonstrate that the data protection fees offset expenditure on data protection functions.

Freedom of information

The Secretary of State for Constitutional Affairs provides an annual grant-in-aid to the Information Commissioner to fund his expenditure on freedom of information work. Grant-in-aid issued to the Information Commissioner reflects a need for cash, and is not paid to match accruals based expenditure.

There are no fees collected by the Information Commissioner in respect of freedom of information.

Apportionment of costs

Staff costs and other running costs are apportioned between the data protection and freedom of information functions on the basis of costs recorded in the Information Commissioner’s management accounting system. This system allocates expenditure to various cost centres across the organisation. A financial model is then applied to apportion expenditure between data protection and freedom of information on an actual basis, where possible, or by way of a reasoned estimate where costs are shared.

Accounting basis

Accruals accounting is an accounting concept under which income and expenditure are recognised in the accounts for the period in which they are earned or incurred. This is in contrast to cash accounting under which income and costs are recognised in the accounts as money is received or paid. Accruals accounting allows the income received from fees to be properly matched over the accounting period to the expenditure.

Controls

The apportioned splits between data protection and freedom of information activities is shown below, firstly on an accruals accounting basis to comply with the spirit of the Treasury Fees and Charges Guide.

To demonstrate compliance with the general framework controls agreed between the Department for Constitutional Affairs and the Information Commissioner, information is also presented on a cash accounting basis.

Under the terms of the agreed Framework Document between the Information Commissioner and the Department for Constitutional Affairs up to 2% of the annual grant-in-aid can, with prior consent, be carried forward for spending in the next financial year. Similarly, up to 3% of fees collected which have been cleared through the banking system and are available for spending in the year, can be carried forward to spend in the next financial year. Any fees not cleared at the end of the year are regarded as cash in transit and are available for expenditure in the next financial year.

The segmental information has not been disclosed for the purpose of Standard Statement of Accounting Practice 25: Segmental Reporting.

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