Accounts
for the year ended 31 March 2007

Foreword

History

On 12th June 2003 responsibility for the Information Commissioner passed to the newly created Department for Constitutional Affairs. Previously, responsibility for the Information Commissioner passed to the Lord Chancellor’s Department from the Home Office following the Machinery of Government changes announced in June 2001.

Following implementation of the Data Protection Act 1998 on 1 March 2000, the corporation sole by the name of Data Protection Registrar, established by the Data Protection Act 1984, continued in existence but under the name Data Protection Commissioner.

The Freedom of Information Act 2000 received Royal Assent on 30 November 2000. The title of Data Protection Commissioner changed to Information Commissioner with effect from 30 January 2001.

The Information Commissioner is sponsored by the Ministry of Justice established on 9 May 2007, replacing the Department for Constitutional Affairs.

Statutory background

The Information Commissioner’s main responsibilities and duties are under the Data Protection Act 1998, the Freedom of Information Act 2000, the Environmental Information Regulations 2004 and the Privacy and Electronic Communications (EC Directive) Regulations 2003.

The Information Commissioner is not a typical non-departmental public body. Such bodies usually have a relationship with Ministers which is based on the delegation of ministerial powers. The Commissioner is an independent body created by statute that reports directly to Parliament. The Commissioner is required to carry out those functions laid down in the Data Protection Act 1998 and Freedom of Information Act 2000, using only those powers which these Acts set out. The Commissioner’s decisions are subject to the supervision of the Information Tribunal and the courts.

The Information Commissioner is responsible for setting the priorities for his Office, for deciding how they should be achieved, and is required annually to lay before each House of Parliament a general report on performance.

Annual accounts and audit

The annual accounts have been prepared in a form directed by the Secretary of State for Constitutional Affairs with the consent of the Treasury in accordance with paragraph (10)(1)(b) of Schedule 5 to the Data Protection Act 1998.

Under paragraph (10)(2) of Schedule 5 to the Data Protection Act 1998 the Comptroller and Auditor General is appointed auditor to the Information Commissioner. The cost of audit services in the year was £21,000 (2005/06: £20,000) and no other assurance or advisory services were provided.

So far as the Accounting Officer is aware, there is no relevant audit information of which the Comptroller and Auditor General is unaware, and the Accounting Officer has taken all the steps that he ought to have taken to make himself aware of relevant audit information and to establish that the Comptroller and Auditor General is aware of that information.

Senior management

A list of senior managers is set out in Section 10 of the published Annual Report.

Pension liabilities

The treatment of pension liabilities is set out in the Remuneration report on pages 64-67, and Note 4 to the Accounts.

Employee policies

The Commissioner’s equal opportunities policy aims to ensure that no potential or actual employee receives more or less favourable treatments on the grounds of race, colour, ethnic or national origin, marital status, sex, sexual orientation, age, religious belief or disability. To further this policy the Information Commissioner’s Office (ICO) promotes the observance of good employment practice particularly where relevant to disabled people.

The Commissioner has an Equality Scheme approved by the Northern Ireland Equality Commissioner, produced as part of his responsibilities under section 75 of the Northern Ireland Act 1999.

The Information Commissioner continues to place importance on ensuring priority is given to the provision of appropriate training so that staff can develop skills and understanding of their roles in line with the aims and objectives of the ICO. A full-time training officer has been in place throughout the year.

Maintenance of the provision of information to, and consultation with, employees continues to be managed through a newsletter, staff intranet and regular meetings with Trade Union representatives, and briefings for all staff were held to ensure staff were being kept up to date with the significant changes affecting the ICO. A formal Health and Safety Policy Manual is available to all members of staff and a Health and Safety Committee is in place to address health and safety issues.

Changes in fixed assets

During the year £572,836 was spent on information services upgrading the applications and infrastructure provided for the IT network. £51,403 was spent on the refurbishment of newly leased premises in Cardiff, and £79,032 was spent on office machinery and upgrading telephony.

Creditor payment policy

The Information Commissioner has adopted a policy on prompt payment of invoices which complies with the ‘Better Payment Practice Code’ as recommended by government. In the year ended 31 March 2007, 98.3% (31 March 2006: 97.8%) of invoices were paid within 30 days of receipt or, in the case of disputed invoices, within 30 days of the settlement of the dispute. The target percentage was 95%.

Management commentary

A detailed review of activities and performance for the year of the ICO is set out in sections 1 to 11 of the published Annual Report.

Financial performance

Grant-in-aid

Freedom of information expenditure continued to be financed by a grant-in-aid from the Department for Constitutional Affairs (DCA), and for 2006/07 £5,550,000 (2005/06: £5,100,000) was drawn down.

Under the conditions of the Framework Document between the Information Commissioner and the DCA up to 2% of the annual grant-in-aid can, with the prior consent of the DCA, be carried forward to the following financial year. At the end of the financial year an amount of £6 (2005/06: £97,576 1.9%) was carried forward for expenditure in 2007/08 with the permission of the DCA.

There are no fees collected in respect of freedom of information type activities.

Fees

Expenditure on data protection activities is financed through the retention of the fees collected from data controllers who notify their processing of personal data under the Data Protection Act 1998.

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

Fee income collected in the year was £10,204,761 (2005/06: £9,655,060) representing an increase of almost 5.7% over the previous year. This information is provided for fees and charges purposes, rather than compliance with SSAP 25.

Under the conditions of the Framework Document between the Information Commissioner and the DCA, fees ‘cleared’ through the banking system, up to an amount of 3% of the expenditure of data protection activities can be carried forward for expenditure to the following financial year. At the end of the financial year an amount of £301,467 (3%) (2005/06: £111,426 (1.2%)) was carried forward for expenditure in 2007/08, as was a further £159,236 (2005/06: £159,620) of ‘un-cleared’ fees.

Accruals outturn

There was a retained deficit for the year of £7,439,909. This result is largely brought about due to the change in the accounting policy for grant-in-aid which resulted in £5,550,000 of grant-in-aid received in the year being taken to the Income and Expenditure Reserve rather than the Income and Expenditure Account. In addition, accruals of both income and expenditure have contributed to the year-end position, although on a cash basis the ICO has stayed within target.

The accounts continue to be prepared on a going concern basis as a non-trading entity continuing to provide public sector services. Grant-in-aid has already been included in the DCA’s estimate for 2007/08, which has been approved by Parliament, and there is no reason to believe that future sponsorship and future parliamentary approval will not be forthcoming.

Treasury management

Under the terms of the Framework Document between the Information Commissioner and the DCA, the Commissioner is unable to borrow or to invest funds speculatively.

Fee income is collected and banked into a separate bank account, and cleared funds are transferred weekly to the Information Commissioner’s administration account to fund expenditure.

In accordance with Treasury guidance on the issue of grant-in-aid that precludes nondepartmental public bodies from retaining more funds than are required for their immediate needs, grant-in-aid is drawn in quarterly tranches. In order not to benefit from holding surplus funds, all bank interest and sundry receipts received are appropriated in aid to the Secretary of State for Constitutional Affairs on a quarterly basis.

Richard Thomas, Information Commissioner
11 June 2007

Remuneration report

Remuneration policy

The remuneration of the Information Commissioner is set in accordance with a motion made pursuant to Standing Order 118(6) (Standing Committees on Delegated Legislation) and is increased annually on 1st April, by the average percentage by which the mid-points of the senior civil service pay bands increase.

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

The salary of the Information Commissioner is paid directly from the Consolidated Fund in accordance with paragraph 3(5) of Schedule 5 to the Data Protection Act 1998.

The remuneration of staff and other officers is determined by the Information Commissioner with the approval of the Secretary of State for Constitutional Affairs.

In reaching the determination, the Information Commissioner and Secretary of State for Constitutional Affairs have regard to the following considerations:

• the need to recruit, retain and motivate suitably able and qualified people to exercise their different responsibilities;
• government policies for improving the public services;
• the funds available to the Information Commissioner;
• the government’s inflation target and Treasury pay guidance.

Service contracts

Unless otherwise stated below, staff appointments are made on merit on the basis of fair and open competition, and are open-ended until the normal retiring age of 60. Early termination, other than for misconduct, would result in the individual receiving compensation as set out in the Civil Service Compensation Scheme.

Non-Executive Board Members are paid an annual salary of £12,000 and are appointed on fixed term contract periods expiring on 18 June 2009.

Directorships and other significant interests held by Board Members which may conflict with their management responsibilities

A Register of Interests is maintained for the Information Commissioner, his two Deputy Commissioners and his four Non-Executive Board Members, and is published on the Commissioner’s website www.ico.gov.uk.

Salary and pension entitlements

The following sections provide details of the remuneration and pension interests of the Information Commissioner and the most senior officials employed by the Information Commissioner.

Remuneration

Salary	2006/07 £'000	2005/06 £'000
Richard Thomas, Information Commissioner	95-100	95-100
David Smith, Deputy Commissioner	60-65	25-30 (Full year equivalent 60-65)
Graham Smith, Deputy Commissioner	70-75	70-75

Salary

‘Salary’ comprises gross salary and any other allowance to the extent that it is subject to UK taxation.

Benefits in kind

None of the above received any benefits in kind during 2006/07.

Partnership pensions

There were no employer contributions for the above executives to partnership pension accounts in the year.

Civil service pensions

Pension benefits are provided through the Civil Service pension arrangements. The scheme is a defined benefit scheme, which prepares it own scheme statements. From 1 October 2002, employees may be in one of three statutory based ‘final salary’ defined benefit schemes (classic, premium, and classic plus). The schemes are unfunded with the cost of benefits met by monies voted by Parliament each year. Pensions payable under classic, premium, and classic plus are increased annually in line with changes in the Retail Prices Index. New entrants after 1 October 2002 may choose between membership of premium or joining a ‘money purchase’ stakeholder arrangement with a significant employer contribution (partnership pension account).

Employee contributions are set at the rate of 1.5% of pensionable earnings for classic and 3.5% for premium and classic plus. Benefits in classic accrue at the rate of 1/80th of pensionable salary for each year of service. In addition, a lump sum equivalent to three years’ pension is payable on retirement. For premium, benefits accrue at the rate of 1/60th of final pensionable earnings for each year of service. Unlike classic, there is no automatic lump sum (but members may give up (commute) some of their pension to provide a lump sum). Classic plus is essentially a variation of premium, but with benefits in respect of service before 1 October 2002 calculated broadly in the same way as classic.

The partnership pension account is a stakeholder pension arrangement. The employers makes a basic contribution of between 3% and 12.5% (depending on the age of the member) into a stakeholder pension product chosen by the employee from a selection of approved products. 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 0.8% 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 the website www.civil service-pensions.gov.uk

Cash Equivalent Transfer Values

A Cash Equivalent Transfer Value (CETV) is the actuarially assessed capitalised value of the pension scheme benefits accrued by a member at a particular point in time. The benefits valued are the member’s accrued benefits and any contingent spouse’s pension payable from the scheme. A CETV is a payment made by a pension scheme or arrangement to 67 secure pension benefits in another pension scheme 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 CETV figures, and from 2003/04 the other pension details, include the value of any pension benefit in another scheme or arrangement which the individual has transferred to the Civil Service pension arrangements and for which the Civil Superannuation Vote has received a transfer payment commensurate with the additional pension liabilities being assumed. They also include any additional pension benefit accrued to the member as a result of their purchasing additional years of pension service in the scheme at their own cost. CETVs are calculated within the guidelines and framework prescribed by the Institute and Faculty of Actuaries.

Real increase in CETV

This reflects the increase in CETV effectively funded by the employer. It takes account of 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.

Richard Thomas, Information Commissioner
11 June 2007

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