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3
Governance 27
Corporate Governance Framework 27
Governance arrangements 27
Board 27
Audit Committee 28
Commissioners 28
Management Team 28
Directors’ Report 29
Review of activities during the financial year and developments for the future 30
Statement of Directors’ responsibilities 32
Auditor’s Report 33
Financial Statements 35
In addition to working on the issues listed above, we were As Chair and Chief Executive we emphasised that we felt
delighted to take on more independent status within this was an unwise decision and one which will have a
Government on 1 February 2009; still sponsored by the significant negative impact on the ability of Government
Department for Environment, Food and Rural Affairs (Defra) to make continued progress on sustainable development.
but better able to develop relationships across Whitehall However, we have also given our assurance that we will
Departments, and with the administrations in Scotland, work constructively to transfer learning and any functions
Wales and Northern Ireland. as part of this work to mainstream sustainability, while also
managing any wind up of SDC’s own work and functions.
Over the past year, the SDC has seen increasing evidence
of the benefits secured within the parts of Government Arrangements for continuing work on sustainable
which have tried to adopt a sustainable development development in Wales, Scotland and Northern Ireland
approach. As with any change process, confidence is being have yet to be decided, and these may be based around
gained from these first steps. However, we anticipate that the SDC, involve bespoke organisations in those places, or
much bigger challenges are to come, and the full potential even see functions absorbed into the respective devolved
for sustainable development to deliver much needed administrations.
improvements to services, more effective polices and more
Will Day Chairman
efficient operations is simply huge and largely untapped to
date. This is not a party political issue. Our Business Plan for Andrew Lee Chief Executive November 2010
Introduction — 5
Vice Chairs’ introductions
N.B. A
s we go to press the three Devolved Administrations are
still in the process of deciding the future arrangements
for sustainable development in Scotland, Wales and
Northern Ireland following the Defra decision to withdraw
funding for the SDC in Whitehall. It is likely that these
arrangements will vary.
Introduction — 7
About the Sustainable Development Commission
The SDC holds Government to account to ensure the needs We are jointly owned by the UK Government, the Scottish
of society, the economy and the environment are properly Government, the Welsh Assembly Government and the
balanced in the policy decisions it makes and the way it Northern Ireland Executive, reporting directly to the Prime
runs itself. Minister and First and Deputy First Ministers.
We are the only organisation charged with reporting The SDC has existed under this name since 2000, when
publicly, independently and impartially on the extent to it took on the roles previously performed by the British
which Government decisions contribute towards a fair, Government Panel on Sustainable Development and the UK
healthy and prosperous future for everyone. Round Table on Sustainable Development which had been
established in 1994 and 1995 respectively.
We take as our starting point the five principles of We work with the UK’s four Governments to ensure each
Sustainable Development (see below) agreed by the UK has the evidence and the skills needed to deliver a better
Government and the Devolved Administrations in Scotland, quality of life for everyone today, without endangering the
Wales, and Northern Ireland in 2005. chances of future generations.
Living within environmental limits Ensuring a strong, healthy and just society
Respecting the limits of the planet’s environment, Meeting the diverse needs of all people in existing and
resources and biodiversity – to improve our environment future communities, promoting personal wellbeing, social
and ensure that the natural resources needed for life are cohesion and inclusion, and creating equal opportunity.
unimpaired and remain so for future generations.
Achieving a sustainable economy Using sound science responsibly Promoting good governance
Building a strong, stable and sustainable Ensuring policy is developed and implemented Actively promoting effective, participative
economy which provides prosperity on the basis of strong scientific evidence, systems of governance in all levels of
and opportunities for all, and in which whilst taking into account scientific uncertainty society – engaging people’s creativity,
environmental and social costs fall on those (through the precautionary principle) as well energy and diversity.
who impose them (polluter pays), and efficient as public attitudes and values.
resource use is incentivised.
Our Commissioners are public appointments and provide Jonathon Porritt (to 26th July 2009)
insight and policy guidance, specialist expertise and
leadership for the SDC’s work. In accordance with the rules Will Day
for such appointments, they are now only allowed to serve
for a maximum of two three-year terms, so we have had a Jan Bebbington
substantial turnover in 2009-10. Recommendations for six
new Commissioners through the approvals system were Peter Davies
delayed due to the General Election and will not now go
ahead. Tess Gill
Chair (to 26 July 2009) – Jonathon Porritt (Paul Rew – from April 2010)
Vice-Chair (Whitehall) – Rebecca Willis Chair (from 27 July 2009) – Will Day
Vice-Chair (Northern Ireland) – position vacant Will Day is a Senior Associate of the University of Cambridge
Programme for Sustainability Leadership, a part-time
Bernard Bulkin (to December 2009) Sustainability Advisor to PricewaterhouseCoopers in the UK
and a Special Advisor to the United Nations Development
Lindsey Colbourne (to October 2009) Programme (UNDP). He was Chief Executive of Care
International and was instrumental in the establishment of
Anna Coote (to October 2009) Comic Relief.
Stewart Davies
Alice Owen
Vice-Chair (Scotland) – Jan Bebbington
Anne Power (to October 2009)
Jan Bebbington is Professor of Accounting and Sustainable
Hugh Raven (to March 2010) Development in the Centre for Social and Environmental
Accounting Research at the University of St Andrews. Jan’s
Waheed Saleem (to July 2009) research interests focus around the themes of corporate
reporting on sustainable development, full cost accounting
and modelling as well as governance for sustainable
development.
Introduction — 9
Vice-Chair (Wales) – Peter Davies Stewart Davies
Formerly at Business in the Community, Peter Davies Dr. Stewart Davies is the SDC’s Commissioner for Business.
established the Project Development Partnership in 2005, Stewart has over twenty years’ experience in general
providing project consultancy to business, government management and strategy in industry, including Managing
and the voluntary sector. Peter coordinates the work of The Director roles for Corus, Rugby Cement, Serco and currently
Prince’s Charities in Wales and is chair of the West Wales Romec Ltd. He is also a member of the governing board of
branch of The Institute of Welsh Affairs. the Technology Strategy Board, to which he was appointed
in June 2009.
Tess Gill
Bernard Bulkin (to December 2009)
Tess Gill is the SDC’s Commissioner for Work and Skills.
Bernie Bulkin retired as the SDC’s Commissioner for Energy She is a leading barrister specialising in employment,
and Transport in December 2009 to become Chair of the particularly discrimination, industrial law, and human
Office for Renewable Energy Deployment at the Department rights. Tess is a part-time Employment Judge and trained
of Energy and Climate Change (DECC). Formerly chief scientist Mediator and has held posts in a wide number of voluntary
at BP, he is a non-Executive Director of AEA Technology plc, organisations concerned with issues of diversity and social
serves on numerous charitable boards, and has written justice.
extensively on the areas of energy and transport.
Tim Jackson
Lindsey Colbourne (to October 2009)
Tim Jackson is Professor of Sustainable Development in
Lindsey Colbourne was the SDC’s Commissioner for the Centre for Environmental Strategy at the University of
Engagement, retiring in October 2009. She established Surrey. Tim’s current research interests include consumer
the NGO Vision 21 in 1993 and is now also coordinator behaviour, sustainable energy systems, ecological
of InterAct, an alliance committed to using engagement economics and environmental philosophy. He is the SDC’s
techniques to promote sustainable development. Commissioner for Economics.
Anna Coote (to October 2009) Alan Knight (to October 2009)
Anna Coote was the SDC’s Commissioner for Health, retiring Alan Knight is sustainability advisor to the Virgin Group,
in October 2009. She is Head of Public Sector Policy at the and has also advised SAB Miller, Wyeville Garden Centres
new economics foundation. Anna was Deputy Director of and the Kingfisher Group on supply chain issues. He was
the Institute for Public Policy Research (IPPR) from 1993- instrumental in creating the Forest Stewardship Council and
1997, where she led the Institute’s work on health and is a fellow of WWF-UK. Alan was the SDC’s Commissioner for
social policy. Thereafter she worked for the Healthcare Business and Sustainable Consumption, retiring in October
Commission. 2009.
Tim Lang is Professor of Food Policy at City University, Andrew Lee, the Chief Executive of the SDC, serves on the
specialising in how public and private policy shape the Board as Accounting Officer. An environmental biologist
food supply chain, what people eat and the societal, by training, he worked for the previous twenty years of
health, and environmental consequences. Tim is the SDC’s his career in the NGO sector – as Campaigns Director and
Commissioner for Natural Resources and Land Use. formerly Policy Director for WWF-UK, and before that
leading the Sussex Wildlife Trust. He is a trustee of Global
Action Plan, an NGO specialising in behaviour change.
Alice Owen
Paul Rew
Anne Power (to October 2009)
Paul Rew is a non-executive director of the Met Office
Anne Power is Professor of Social Policy at the London and a member of the Business School Advisory Board
School of Economics and Deputy Director of the Centre of the University of Exeter. He was formerly a partner
for Analysis of Social Exclusion. Since 1965 she has been in PricewaterhouseCoopers and the sector leader for
involved in European and American housing and urban Energy and Utilities and for Renewables. Paul led the PwC
problems. Anne was the SDC’s Commissioner for the Built Sustainability and Climate Change Assurance business.
Environment, retiring in October 2009.
John Schultz
Hugh Raven (to March 2010)
John Schultz has recently retired after 16 years as Chief
Hugh Raven is Director of the Soil Association Scotland Executive of Stockport Council – a high-performing local
and is special advisor to the Esmée Fairbairn Foundation authority that has for many years given a high priority
on the environment. He also helps run Ardtornish, his to sustainability issues. John has served on a number of
family’s estate in north Argyll and is active in the Slow advisory bodies at national, regional and city level.
Food movement. Hugh retired from the Commission in
March 2010.
Introduction — 11
Highlights of the year
This report covers the period from 1 February 2009, when the SDC was made independent of Defra, through to 31 March 2010.
February July
The SDC becomes an independent Non-Departmental Public HRH the Prince of Wales and key Ministers from Whitehall
Body (NDPB) jointly owned by the UK Government, the and the Welsh Assembly Government join Anna Ford,
Northern Ireland Executive, the Scottish Government and Jonathan Dimbleby and 400 delegates as the SDC
the Welsh Assembly Government. showcases 19 ideas for Breakthroughs for the Twenty-
First Century.
The SDC welcomes government plans for home energy
efficiency in line with recommendations in our 2006 After nine years at the helm, founder SDC Chair Jonathon
report Stock Take. Porritt steps down and is succeeded by Will Day.
March September
The SDC’s Sustainable New Deal identifies the potential In its Review of Public Service Regulators, the SDC
to create 800,000 jobs by upgrading existing housing, commends the Audit Commission and Ofsted for a solid
promoting sustainable travel and renewable energy, start on prioritising sustainability, but find the Care Quality
de-carbonising the public sector and investing in Commission has ‘significant ground to cover’.
sustainable skills.
The SDC’s partnership with the Department for Children,
Schools and Families (DCSF) is shortlisted from a record
number of entries for this year’s Civil Service Awards.
April
The Scottish Sustainable Development Forum, working
Review of public service regulators
with SDC Scotland, launches its Green List. The final list of
50 individuals making the most positive contribution to
Scottish sustainability are profiled in the Scotsman. Review of
public service
www.sd-commission.org.uk
regulators
May
Scotland
ambitions. Osborne House
1 Osbourne Terrace, Haymarket
Edinburgh EH12 5HG
0131 625 1880
Scotland@sd-commission.org.uk
The SDC publishes Prosperity without Growth?, its
www.sd-commission.org.uk/scotland
Northern Ireland
Room E5 11, OFMDFM
Castle Buildings, Stormont Estate,
Belfast BT4 3SR
028 9052 0196
N.Ireland@sd-commission.org.uk
www.sd-commission.org.uk/northern_ireland
The SDC and Department of Health (DH) launch their Defra’s Food 2030 strategy draws on the SDC’s advice
updated Good Corporate Citizenship website, helping NHS on healthy, sustainable diets.
Trusts become more efficient while benefiting patients,
communities and the environment. By March 2010, over The Department for Transport welcomes the SDC’s
70% of NHS Trusts in England have signed up. Smarter Moves report, saying it will ‘help to shape
strategic thinking in DfT and in the transport policy
The Financial Times selects Prosperity Without Growth community more widely.’
as one of its Books of the Year.1
December March
The SDC reports that sustainability in Whitehall’s operations A Scotland-specific version of our Good Corporate
has turned a corner, with departments in a strong position Citizenship model is rolled out in partnership with Health
to meet carbon targets for the first time ever. Facilities Scotland and the Scottish Government
Our Third Annual Assessment of sustainability in Scotland The new School Development Plans announced by the
finds progress on renewable energy and waste, but voices Northern Ireland Department for Education include a
concerns about transport, public health and inequality. specific focus on sustainable development, following the
SDC’s recommendations.
The SDC’s first Sustainable Development in Government
report on a devolved administration is published in
Wales, revealing a mixed picture in the Welsh Assembly
Government.
Prosperity without growth?
ion.org.uk
Prosperity
www.sd-commission.org.uk
England
(Main office)
55 Whitehall
London SW1A 2HH
Low
0300 068 6305
without
enquiries@sd-commission.org.uk
Scotland
Osborne House
growth ? Carbon
rg.uk 1 Osborne Terrace
Edinburgh EH12 5HG
0131 625 1880
Scotland@sd-commission.org.uk
ket
www.sd-commission.org.uk/scotland
g.uk
/scotland
,
Wales
Room 1, University of Wales
University Registry
King Edward VII Avenue
Cardiff CF10 3NS
Wales
ward VII Avenue,
029 2037 6956 Regional Priorities for Action
Wales@sd-commission.org.uk
Sustainable Development Commission
uk www.sd-commission.org.uk/wales
/wales
Northern Ireland
The transition to a
Room E5.11, Castle Buildings
Stormont Estate,
state, Belfast BT4 3SR
sustainable economy
028 9052 0196
rg.uk N.Ireland@sd-commission.org.uk
/northern_ireland www.sd-commission.org.uk/northern_ireland
26/3/09 18:08:10
SDC_LCR_cover_litho.indd 1 3/12/09 13:24:42
Introduction — 13
Holding Government
to account
The greener, fairer, healthier future we all want will not These carbon savings are equivalent to £16m of savings
come about by accident, and the government has pledged in public expenditure. Over the same period a reduction in
to be its champion and to lead by example. The SDC has a water consumption delivered savings of £13m.
uniquely independent remit to hold the government
to account on the extent to which its operations are In Scotland, our Annual Assessment of the sustainability
becoming more sustainable. We have had considerable of the Scottish Government’s policies has been the
success in helping to turn this performance around. cornerstone of our work for the last three years, and
In 2005, our assessment showed that the carbon footprint we published our first report on the Welsh Assembly
of Government offices was still rising rapidly on 1990 Government’s environmental sustainability this year.
levels. By contrast, last year we were delighted to report And with the UK Government, we expanded our reporting
a 10% reduction in emissions from offices against the role to examine the contribution of three public service
baseline, and that the target for reducing emissions from regulators – the Audit Commission; Ofsted and the Care
administrative road vehicles had been exceeded. Quality Commission – to sustainable development.
The decisions made by Government have an impact on the at traditional business areas. The aim is to enable the
sustainability of the UK which goes far beyond its internal department to meet its own policy goals as sustainably as
operations and procurement. Similarly, the SDC’s scrutiny possible.
role covers not just operational areas, but also the impact of
plans and policies on sustainability, and the overall standing We also began work with Defra to review the set of
of sustainable development in Government. cross-Government indicators designed to assess how well
policy decisions contribute to sustainability, and conducted
In Scotland, our Annual Assessment of sustainable a review of eight Impact Assessments – the process by
development in the Scottish Government’s policies is the which UK Government Departments calculate the effect
cornerstone of our work. We use its own performance of major policies on the environment, the economy and
framework to analyse all policy areas, this year involving communities. Several of our recommendations were
officials from right across the executive in the development adopted by the Better Regulation Executive in its guidance
of our Third Assessment. We found good progress in for policymakers, but there is still some way to go to
areas including renewable energy and waste, but less on make sure the Impact Assessment process is asking the
public health. Some areas of economic performance were right questions. Our work in this area has, however, led
still found to be weak, and there was no evidence of a the Government Economic Service to recommend a new
narrowing of the gap between highest and lowest earners, sustainable development test in its interim report on the
all of which is worrying from a sustainable development economics of sustainable development.
perspective.
Public services in the health, education and local authority in Ofsted, but the CQC as yet unwilling to accept that
sectors employ one in seven workers in the UK, and sustainability falls within its remit.
spend £88billion on goods and services. Their powers
to commission and deliver services also have immense The Audit Commission and Ofsted are both implementing
potential to affect communities, the environment and the our recommendations, and we continue to work with the
economy. The bodies that regulate these sectors have a CQC to find areas of common ground where the benefits of
great influence over the work of Local Authorities, schools, sustainable development can be made clear.
hospitals and Primary Care Trusts, and we believe that they
have a vital role to play in encouraging sustainability.
The SDC’s Review of public service regulators, published in “Sustainable development is a high priority for
September 2009, was the culmination of two years’ work
us. We welcome this report, and although it’s
with Ofsted, the Audit Commission and the Care Quality
clear we’re making great strides to become a
Commission (CQC – formerly the Healthcare Commission).
The project highlighted the SDC’s dual role, in partnering greener organisation, there is obviously more
with organisations to develop the skills to enable change, to do. We’ve made it clear to councils and their
and in monitoring their journey towards that change. partners that greener working is no longer a
We drew up challenging goals for each regulator, and ‘nice-to-have’, but a crucial element of any
worked with them to help put sustainable development area’s future success. But we have to make
at the heart of their assessment frameworks. We also sure we’re taking our own medicine, which is
provided support to their staff in developing the skills to why we are challenging our own business to
achieve genuine progress on sustainability. improve its green credentials.”
Michael O’Higgins
The ensuing report found a mixed picture, with strong Chairman, Audit Commission
progress from the Audit Commission, moderate progress
The UK’s hospitals and schools consistently top the political Encouraged by this success, we also rolled out the
agenda. Applying sustainable development principles to Good Corporate Citizenship Model in Scotland this year.
these crucial policy areas saves the public money, helps Together with Health Facilities Scotland, SDC Scotland used
deliver a better quality of life and paves the way to a workshops and engagement with health boards to develop
healthier and greener future. a tailored version of the website, which went live in March
2010, along with a workshop pack for boards to get started.
This year saw the continuation of our highly successful, It has been developed to work equally well for regional and
multi-year partnerships with DH and DCSF, with significant special boards. It has since become a statutory requirement
changes being made in both. for all health trusts in Scotland to sign up to the model.
We also re-launched our groundbreaking Good Corporate We are enthusiastic about the potential for this Good
Citizenship Model website, developed in partnership with Corporate Citizenship approach to contribute to the
the NHS, which enables Trusts to assess the environmental transformation of other public sector organisations, and
and social impacts of their work and to benefit from the our expertise is being put to use in our work with the
collective experience of other trusts. Scottish Government to support its Public Sector Duty under
Scotland’s Climate Change Act.
The NHS is responsible for more than 18 million tonnes
of CO2 per year – over 3% of England’s carbon emissions. In Wales, we have maintained our close involvement with
It spends £410 million every year on energy bills and NHS and health policy, and supported the Welsh Assembly
£70 million on disposing of waste. The Good Corporate Government in putting sustainable development at the
Citizenship Model goes beyond the obvious areas of centre of the newly-reorganised health service. The
waste reduction, energy efficiency and operational issues, Commission advised government officials on measuring the
encouraging measures that will prevent illness, cut carbon footprint of NHS Wales.
down on the need for treatment and promote healthier
communities – saving money in the longer term. It also The SDC has taken the innovative approach of ‘embedding’
tackles procurement, stressing the benefits to communities, staff in partner departments since 2005, to help them put
local economies and the environment of local sourcing and sustainable development at the heart of their thinking.
making the supply chain more sustainable. This year, SDC staff were placed in both the Children
and Families Directorate (CFD) and the Young People’s
By March 2010 we had achieved the highest ever uptake Directorate (YPD) in DCSF. The success of this approach was
of the Good Corporate Citizenship assessment model, reinforced when the partnership was shortlisted for this
with over 70% of NHS trusts in England signed up. This year’s Civil Service Awards.
demonstrates a real appetite amongst health professionals
for tackling the issue of sustainability, a desire that the At DCSF, we helped create a checklist to put sustainability at
assessment model will go a long way towards making a the heart of every policy decision on children and families,
reality. and began work on a set of indicators for ‘Good Places
to Grow Up’, for use both by national policy makers and
In Northern Ireland, following a meeting between the SDC The SDC also worked closely with local colleges in Northern
and Minister for Education Catriona Ruane MLA, there was Ireland throughout the year. In particular, staff built strong
a groundbreaking announcement in the Department for working relations with Newry Technical College when
Education’s draft regulations for School Development Plans. advising on a project for the creation of a low carbon zone
The draft specifically includes sustainable development as in the border city. This innovative and collaborative project
a key component of the new regulations governing school will hopefully place Newry at the forefront of thinking and
development plans across Northern Ireland. planning for the transition to a low carbon society.
Since March 2005, all Central Government departments development. FCO’s new approach has included progress
and executive agencies have been required to produce a towards putting sustainable development at the heart of
Sustainable Development Action Plan (SDAP), a key way business planning and raising staff awareness of the issue.
of converting good intentions into action. These SDAPs set
out how they will contribute to the Government’s overall Government departments are now also required to produce
sustainable development goals, through policymaking as individual plans for Carbon Reduction Delivery and Climate
well as internal operations, procurement and workforce Change Adaptation, and the SDC has worked with DECC and
management. Defra to streamline the links between SDAPs and these
plans.
In addition to providing support to departments in
developing their SDAPs, the SDC reports publicly on the
quality of published plans, and monitors departments’
progress against the actions set out in their plans. In 2009- “We are pleased the SDC recognises the work
10, the SDC provided support, guidance and assessment to: we do to promote sustainable development
by embedding it in each of our departmental
• 15 departments strategic objectives and through our estates
• 11 executive agencies management. We have changed our approach
• 5 NDPBs to embedding SD in the FCO since the plan was
• 1 NHS trust. drawn up.”
Chris Bradley
In many instances, our assessments have led to real Head of Chief Scientific Adviser’s Office
change. For example, the Foreign and Commonwealth Foreign and Commonwealth Office
Office (FCO) reinvigorated its whole approach to sustainable
Government officials need the skills to put sustainable We are also working closely with the Northern Ireland
development at the heart of policymaking. Helping them to Executive to develop a sustainable consumption strategy for
acquire those skills is one of the SDC’s key roles. We bring Northern Ireland.
together civil servants from across departments to share
best practice, identify common barriers to progress and In March we supported the Welsh Assembly Government’s
come up with creative, collaborative solutions to shared creation of its Wales Low/Zero Carbon Hub, a network
problems. To this end, we have worked jointly with Defra’s for the construction sector in Wales, designed to ensure
Sustainable Development Unit to develop a cross-Whitehall that new and existing buildings help the Welsh Assembly
network of sustainable development practitioners, and Government achieve its aims of reducing greenhouse
we are continuing to work with the National School of gas emissions by 3% a year from 2011. SDC Wales played
Government and Government Skills to put sustainability pivotal role in this process, with a Building Research
into core government competencies. Establishment Wales employee seconded to work with us
to provide advice and industry liaison.
In Wales, we drew on our Whitehall experience to
advise the Welsh Assembly Government’s Sustainable
Development Advocates Group. As part of our role as set
out in the One Wales programme for government, we “As our working relationship with the SDC in
also continued to support the work of the Climate Change
Northern Ireland matures we are, on both
Commission for Wales, carrying out a review of its first
policy and operational levels, deepening the
year of operations and providing advice on stakeholder
engagement, best practice and how to tackle some of the sense of common purpose in progressing
more difficult policy questions facing Wales. the sustainable development agenda here.
I know the value the SDC has added to a range
In Northern Ireland, we have been engaging with officials of initiatives we have undertaken through its
and Ministers from the Office of the First and Deputy First inherent expertise and access to knowledge;
Minister in developing the Northern Ireland Executive’s and I believe that its objectivity provides us
new Sustainable Development Strategy. We have provided with both challenge and constructiveness in
advice and support through all aspects of planning and equal measure.”
drafting, and played a key advisory role in the Northern Damian Prince
Ireland wide public consultation. We continue to work Director of the Economic Policy Unit
with officials on the final draft of the Consultation, and Office of the First and Deputy First Minister of Northern Ireland
are currently working with all government departments
and key stakeholders to create a dynamic but achievable
implementation plan.
Sustainable places
The quality of the cities, towns and villages where we live how an integrated neighbourhood approach could improve
affects us all. Public health, psychological wellbeing, the both the quality of places and thereby the quality of life of
economy and the environment are all adversely affected their residents. We also explored the kinds of delivery and
by low-quality housing, a lack of green space and poor funding models needed to make those benefits a reality,
infrastructure in our communities. Improving those places and found evidence of how local residents can lead and
will be a key part of the transition towards a more resilient, drive the improvement of their communities.
fairer and greener society.
The work was supported by a wide partnership including
The right changes to our existing built environment will be DECC, the Department for Communities and Local
critical to the UK’s success in meeting its ambitious targets Government, the Homes and Communities Agency and
for reducing carbon emissions by 2050. At present, 40% Energy Efficiency Partnership for Homes, drawing upon
of the UK’s carbon emissions come from homes and other on the knowledge of over 60 experts from a variety of
physical infrastructure in our communities. In our 2006 backgrounds, as well as more than 60 case studies of good
report, Stock Take, the SDC identified that 80% of today’s practice from Bristol to Stirlingshire.
homes would still be in use in 2050.
Our final recommendations were published in July 2010,
This year, we began to look at how we might retrofit our providing the new Government and our funding partners
homes, public areas and other physical infrastructure to with the evidence which can make these innovative pilot
help deliver not only carbon reductions, but much wider schemes the norm in future.
benefits for local communities. Our research focused on
This report represents the first comprehensive vision of what Welcoming the report, Andrew Davies, then Minister for
a truly low carbon region looks like. Following its launch, we Finance and Public Service Delivery at the Welsh Assembly
developed detailed, practical proposals for helping the Government, called on Welsh regions to ‘significantly scale
Welsh Assembly Government put our advice into practice. up the good practice’ in line with our recommendations.
Energy
If the UK is to be at the forefront of the transition to a low We also provided verbal and written evidence to the Energy
carbon world, tough decisions will be needed, both at the and Climate Change Select Committee on the suite of
community level and in national energy policy. The SDC Energy National Policy Statements.
has provided Government with evidence on a number
of aspects of energy policy over the years. Our landmark In Scotland, we continued to work closely with the Scottish
investigations into the role of wind and tidal power in the Government to provide an authoritative evidence base
UK’s energy mix have helped support and underpin policy for its ambitious targets on energy policy. This year we
development in these areas. provided the background statistics on which it based its
Renewable Heat Action Plan, as well as evidence on the
In our report Turning the Tide, we calculated that the potential for energy from waste. Both these reports have
proposed Cardiff-Weston barrage could supply 4.4% of provided the Scottish Government with the foundation from
the UK’s electricity needs, and could be a sustainable which it can press ahead with innovative programmes to
option, but only if certain key conditions were met, namely make energy use more sustainable.
safeguarding biodiversity and protecting the public interest.
Meeting the first of these means that any scheme must
comply with the EU Directive on Birds and Habitats. The
scale of the impacts involved, and the size and importance “The Scottish Government’s Renewable Heat
of the Severn Estuary, mean that novel approaches would
Action Plan is an excellent example of some
be required to compensate for loss of habitats.
of the positive steps we can take to tackle
As part of DECC’s investigation into the feasibility of various the impact of climate change and shows how
schemes for Severn Tidal Power, the SDC was commissioned innovation and a willingness to invest in the
to investigate this issue in depth, bringing together experts future can bring long-term economic benefits.”
from a range of relevant fields. The SDC’s findings are due Roseanna Cunningham
for publication in autumn 2010, and will provide crucial Environment Minister
evidence for Government when making decisions about the Scottish Government
competing demands for sustainable land use.
Planning
We have continued to provide advice and support to all partner to the Scottish Government in developing both,
government departments on the emerging National Policy and we believe they will be valuable benchmarks to
Statements and their associated Appraisals of Sustainability ensure planning decisions take full account of the potential
as well as on ongoing planning reform at the national, long-term effects – good or bad – on communities and the
regional and local level. environment. Disappointingly, our Third Annual Assessment
concluded that this admirable focus on sustainable
In Scotland, two key policies – the Scottish National development principles in policy has yet to filter through
Planning Framework 2 and the consolidated Scottish and make a real difference to local planning decisions. We
Planning Policies (SPPs) – have provided an important intend therefore, to undertake a thorough examination of
opportunity to ensure sustainability is properly considered the relationship between national and local government,
in planning processes. SDC Scotland was an instrumental and how this helps or hinders sustainable development.
The deepest recession since the 1930s has forced us to ask Parliament – gathered to debate the challenges it raises in
some hard questions of our current economic system. Can November 2009. Briefings have also been held with many
the pursuit of continuous growth driven by debt-dependent Whitehall Departments including Defra, the Department for
material consumption ever produce the economic stability International Development, the Department for Business,
and social wellbeing our society needs, or does the current Innovation and Skills and Her Majesty’s Treasury.
system make collapse inevitable? And is such a system
viable in the face of an unprecedented ecological crisis? Prosperity Without Growth? also provoked great interest
in Scotland, with over 50 senior Government officials
To open up policy and public debate on these issues, the attending an Edinburgh debate. In Northern Ireland, 150
SDC published Prosperity without Growth? The transition key figures from the political, civil service and business
to a sustainable economy, in March 2009. Authored by communities attended a debate at Queens University. In
our Economics Commissioner, Professor Tim Jackson, this Wales, we launched our recommendations ahead of a
groundbreaking report examines the problems caused by government economic summit in Swansea, later holding
our addiction to consumption-driven growth for society, meetings with the Welsh Minister for the Economy and
the environment, and the stability of the economy itself. Transport and senior Welsh Assembly Government officials.
The report recognises that growth is clearly still vital to
deliver basic standards of living and well-being to millions Work has begun this year to take forward two of the
of people in developing countries, and the need for a report’s key recommendations. The SDC is working with
transition to a low-carbon economy in developed countries. Defra and Government economists to ensure full account is
It sets out twelve steps for the transition to a new and taken of environmental limits in the revision of the “Green
more sustainable economic system which does not rely Book” – the official guide to calculating the costs and
on increasing consumption for its stability; which puts benefits of spending and investment. We are also helping
ecological limits at the heart of economic decision-making, to review the current sustainability indicators, to see how
and in which Government helps to create the conditions for these could take better account of people’s wellbeing
people to flourish. rather than relying just on conventional measures of
economic performance and development.
“The facts marshalled by the SDC speak for The SDC also contributed to the debate around a green
stimulus package in 2009. Our Sustainable New Deal
themselves. The analysis is sound. The
identified the potential to create up to 800,000 jobs from
conclusion is troubling. There does seem to
steady investment in a low-carbon recovery, in particular
be something profoundly wrong about our by focusing on upgrading existing housing stock; scaling
system’s addiction to economic growth… up renewable energy supply and improving distribution;
The commission is to be congratulated for promoting sustainable mobility; de-carbonising the public
its brave report, which deserves the widest sector and investing in skills for the future
debate.”
Nicholas Schoon SDC Scotland is continuing to focus on the steps necessary
Editor, The ENDS Report, April 2009
to build a low carbon economic recovery, or a ‘Green
New Deal’ in Scotland. We use our convening role to
bring together a broad coalition of business, trade union,
The report has joined Joseph Stieglitz’s Beyond GDP, the academic and government organisations to bring the
work of the Sarkozy Commission, and many others in widest range of expertise to the discussions.
helping to open up a serious dialogue about the nature
of the transition to a much needed sustainable economy. In Northern Ireland too, we continue to work alongside
Selected as one of the Financial Times’ Books of the Year for the Northern Ireland Green New Deal Group, whose
20091, Prosperity Without Growth has been downloaded recommendations to Government cover housing, travel,
over 10,000 times in the past six months, and widely energy, industry and skills. We believe that taking this
acclaimed worldwide. It has attracted much attention in agenda seriously could help develop a low-carbon
Westminster, where over 120 Government, business and economy; create jobs and address inequality.
NGO representatives – including members of both Houses of
Millions of citizens are already making changes towards a Knight sought to explore one such vision, where lifestyle
more sustainable lifestyle, but it can be hard to know which choices deliver both a fairer, greener world and a good
changes have the most impact. We may recycle, insulate life. This paper put forward ten key principles for a more
our lofts and use fewer carrier bags, but what would truly sustainable lifestyle, with the aim of provoking debate
sustainable lifestyles look like? And how can Government about the future we’re aiming for, and the kind of changes
best support us in making the right choices? needed to bring it about.
A key to this is presenting a positive and accessible vision These principles were debated on the SDC’s online forum,
for a sustainable future. In Sustainable Lives: What will where members of the public were invited to comment on
sustainable lifestyles look like?, SDC Commissioner Alan key topics, and this work will inform our future projects.
Sustainable diets
What we eat has a huge impact both on our health and on Our evidence made sustainable diets a major theme of
the environment. Around 18% of the UK’s greenhouse gas Defra’s Food 2030 strategy, launched in January 2010,
emissions are related to food consumption and production, and we are now ensuring that these recommendations
whilst an estimated 70,000 premature deaths could be are taken forward through working with Defra, DH and the
avoided in the UK each year if our diets matched nutritional Food Standards Agency. In Wales, our Food Commissioner
guidelines. Tim Lang met the Rural Affairs Minister Elin Jones, and
we hosted a roundtable discussion with a broad range of
In July 2009, the SDC published a seven-point plan for a stakeholders to inform our advice to the Welsh Assembly
more sustainable food system, arguing that rocketing food Government on a specific agenda for Wales.
prices, accelerating climate change, and a growing number
of environmental crises show that sustainability is the only
basis for food security. This led to a commission from Defra
to examine how changing patterns of food consumption “Defra’s Food 2030 Strategy recognises the
are affecting our health and the environment. This research need for us to consume and produce food in
led to the publication of Setting the Table: Advice to much more sustainable ways, as the SDC has
government on priority elements of sustainable diets in been advocating for many years. It clearly
December 2009. acknowledges that we can’t continue as we
are if we want to address the challenges of
The SDC’s report concludes that a more environmentally unhealthy diets, climate change and global
friendly diet would benefit our health, and that eliminating food security.”
waste, cutting fatty and sugary foods and reducing carbon- Tim Lang
intensive meat and dairy consumption are the most SDC Commissioner for Natural Resources and Land Use
important steps we can take.
Sustainable travel
With 29% of UK carbon emissions coming from transport, We found significant evidence that ICT solutions could
encouraging more sustainable travel is another key help reduce carbon emissions by enabling eco-driving and
challenge. In our report Smarter Moves: How Information video-conferencing, and by using measures like Intelligent
Communications Technology can promote Sustainable Speed Adaptation. Improvements in air quality, reductions
Mobility, published in January 2010, the SDC investigated in noise levels and the number of deaths caused by road
ways in which Information Communications Technology accidents could all be improved by innovations that are well
(ICT) could help Government meet that challenge. within reach in 2010.
Sustainable lives are healthy lives, and in a fair society communities. These were some of the findings laid out
these healthy lives must be available to all. However, the in Fair Society, Healthy Lives – The Marmot Review,
sad fact is that health inequalities are widening. Climate published in February 2010. This was the final report of an
change in particular will pose major risks to health, risks investigation commissioned by the Secretary of State for
that will be faced disproportionately by the poorest Health in November 2008 and led by Professor Sir Michael
Marmot of University College London. The SDC was closely
involved in contributing to the sustainable development
and built environment aspects of the review. We also
“The health and wellbeing of today’s children, published this work as a stand-alone report, Sustainable
and of those children when they become development: The key to tackling health inequalities.
adults, depend on us having the courage and
imagination to do things differently, to put The SDC’s report calls on Government to put more emphasis
sustainability and well-being before a narrow on tackling the environmental and social root causes of
focus on economic growth and bring about a ill health, a focus which would also yield benefits in the
more equal and fair society.” fight against climate change. The report recommends the
Sir Michael Marmot
promotion of active travel and healthy eating as well as
University College London and increasing the amount of green space in lower-income
Author of Fair Society, Healthy Lives – The Marmot Review communities. Climate change emerged as one of the two
key messages from the Marmot Review.
Sustainable communities
Convinced that the best ideas are often being put into Almost 300 ideas were submitted by a whole range of
practice at local level all across the UK, the SDC ran a organisations and individuals from across the UK. A shortlist
year-long project to uncover and showcase innovative of 40 ideas were then tested with a wider audience, and a
ideas for real ‘breakthroughs’ towards sustainability. This final 19 breakthrough ideas in the areas of sustainable lives,
came to a head on 1 July 2009, when over 400 delegates sustainable places and sustainable economy were given
from Government, business, academia, think-tanks and centre stage at the July event and in the accompanying
community organisations gathered in London for the SDC’s report.
Breakthroughs for the Twenty-First Century event, which
was addressed by HRH the Prince of Wales as well as by Our final breakthrough ideas included:
key Ministers from Whitehall and the Welsh Assembly
Government.
Breakthroughs for the Twenty-First Century demonstrates Meanwhile, the Scottish Green List, launched in April
how many great ideas are already being put into action 2009 by the Scottish Sustainable Development Forum in
around the UK, with individuals and organisations showing partnership with SDC Scotland, proved hugely successful.
commitment and creativity in responding to the challenge Celebrating 50 inspirational individuals and the work they
of creating a more sustainable society. The SDC will have done to make Scotland more sustainable, the final list
continue to use its convening role to bring the best ideas to was published over four days in the Scotsman newspaper,
the attention of Government and business to ensure ideas and individuals listed have reported a considerable increase
like these have the best support to bring about real change in the attention and interest their ideas have received as a
quickly. result.
The SDC Ltd Corporate Governance Framework is the overarching governance document that ensures SDC Ltd aligns with
government guidance on transparency and accountability for non-departmental public bodies as well as taking a robust
approach to risk management.
Governance arrangements
The SDC Ltd is governed by its Board which is supported by the Audit Committee and the Commission, the latter comprises
the Chairman and a number of Commissioners recruited as public appointments and appointed by the Prime Minister.
Board
The SDC Ltd’s Board provides strategic oversight and direction to the organisation. The Board is specifically responsible for:
• establishing and taking forward the strategic aims • ensuring that the Board receives and reviews regular
and objectives of SDC Ltd consistent with its overall financial information concerning the management
strategic direction and within the policy and resources of SDC Ltd; is informed in a timely manner about any
framework determined by the Secretary of State and concerns about the activities of SDC Ltd; and provides
relevant ministers in the Devolved Administrations positive assurance to the sponsor departments that
appropriate action has been taken on such concerns
• ensuring that the work programmes in all parts of the
UK are completed effectively and economically within • demonstrating high standards of corporate governance
available resources and in accordance with the grant- at all times, including by using the independent audit
in-aid provision from each sponsor department committee to help the Board to address key financial
and other risks.
• ensuring that the responsible ministers are kept
informed of any changes which are likely to impact on The Members of the Board to 31 March 2010 were:
the strategic direction of SDC Ltd or on the attainability
of its targets, and determining the steps needed to Jonathon Porritt – Chair (to 26 July 2009)
deal with such changes Will Day – Chair (from 27 July 2009)
Jan Bebbington – Vice Chair, Scotland
• ensuring that any statutory or administrative Peter Davies – Vice Chair, Wales
requirements for the use of public funds are complied Tess Gill – Commissioner for Work, Skills and Health
with; that the Board operates within the limits of Andrew Lee – Chief Executive.
its statutory authority and any delegated authority
agreed with the sponsor departments, and in
accordance with any other conditions relating to the
use of public funds; and that, in reaching decisions,
the Board takes into account guidance issued by the
sponsor departments
Governance — 27
On 1 April 2010 two new Board members were appointed Paul Rew – Non-executive Director
in accordance with the provisions for the appointment of John Schultz – Non-executive Director
non-executive directors in Articles 10 and 11 of SDC Ltd’s
Memorandum of Association and not under the Companies
Act.
Audit Committee
The Sustainable Development Commission Ltd’s Audit From April, 2010 Paul Rew joined the Audit Committee
Committee supports the Board and the Chief Executive (as and in June assumed the role of Chair of the Committee.
Accounting Officer) in the discharge of his responsibilities The previous Chair, Jan Bebbington remains a Member of
for the management of resources and assets, audit the Committee. The current Members are:
arrangements, risk management, internal control, Paul Rew – Chair
governance and associated assurance. The Chair of the Jan Bebbington – Vice Chair, Scotland
Audit Committee submits a written report to the Board after Peter Davies – Vice Chair, Wales
each Audit Committee and presents an annual report to the Tess Gill – Commissioner for Work, Skills & Health
Board.
The Chief Executive is not a member of the Committee
The Members of the Audit Committee to March 2010 were: but attends its meetings, as does the Director of Corporate
Jan Bebbington – Chair Resources, Defra Sustainable Development Unit partners
Peter Davies – Vice Chair, Wales and representatives of SDC Ltd’s internal auditors (Moore
Tess Gill – Commissioner for Work, Skills & Health Stephens) and external auditors (National Audit Office).
Commissioners
The role of Sustainable Development Commissioners is to creative, evidence-based advice to Ministers, Government
use their knowledge and experience to steer and inform Departments, the Devolved Administrations, and the rest of
the work areas of the SDC Ltd and to be ambassadors for the public sector in the UK.
the SDC Ltd. They are also appointed to provide a source of
Management Team
Director, Policy and Research – Sue Dibb & Jake Reynolds (Interim) to 2 December 2009
Shirley Rodrigues from 2 December 2009
Director, Sustainable Development in Government – Minas Jacob (Interim and then permanent from 15 January)
Principal Activities
The Sustainable Development Commission Ltd holds We are jointly owned by the UK Government, the Scottish
Government to account to ensure the needs of society, the Government, the Welsh Assembly Government and the
economy and the environment are properly balanced in the Northern Ireland Executive, reporting directly to the Prime
policy decisions it makes and the way it runs itself. Minister and First and Deputy First Ministers.
We are the only organisation charged with reporting The SDC has existed under this name since 2000 when
publicly, independently and impartially on the extent to it took on the roles previously performed by the British
which Government decisions contribute towards a fair, Government Panel on Sustainable Development and the
healthy and prosperous future for everyone. UK Round Table on Sustainable Development which were
established in 1994 and 1995 respectively.
Structure
The SDC Ltd is an executive non-departmental public was an advisory agency of Defra. Its functions relate to all
body (NDPB) established as a private company limited by parts of the United Kingdom, and therefore, it addresses
guarantee to be the Government’s independent advisor matters which are the responsibility of the UK Government
on sustainable development and which was incorporated and matters which are the responsibility of the Devolved
on 22 January, 2009. Prior to its incorporation, the SDC Administrations.
The SDC Ltd has five members: The Secretary of State for the appointed by the First Minister for Scotland; a person
Environment, Food and Rural Affairs; The First Minister for appointed by the First Minister and Deputy First Minister for
Wales; The First Minister for Scotland; The First Minister for Northern Ireland; and the Chief Executive.
Northern Ireland; and the Deputy First Minister for Northern
Ireland. A Register of Interests is maintained for The Sustainable
Development Commission Limited Directors and
The Board of the Company is comprised of six Directors: Commissioners.
a Chairman; a person appointed by the Secretary of State
for the Environment, Food and Rural Affairs; a person The details of the Board of Directors and Commissioners are
appointed by the First Minister for Wales; a person shown on pages 9-11.
Financial results
The results for the period ending 31 March 2010 are given
in the financial statements on pages 35 and 36.
Directors’ Report — 29
Review of activities during the financial year and developments for the future
A review of SDC Ltd’s activities appears on pages 5 to 26. of activities currently performed by SDC Ltd for them and
of the offices based in Edinburgh, Cardiff and Belfast.
As noted in the Introduction from the Chairman and Dependent upon the outcome of those discussions, the
Chief Executive, the Secretary of State for Environment, activities of SDC Ltd will either have ceased completely or
Food and Rural Affairs announced on 22 July 2010 that been radically reduced by the end of the current financial
funding for the main part of SDC Ltd’s operations based year.
in Whitehall would cease at the end of the financial year
ending 31 March 2011. As a consequence, SDC Ltd revisited In these circumstances, SDC Ltd considers that its revised
its 2010-11 business plan with the view to either ceasing business plan will identify and meet the needs of the
those functions or transferring them to other government transition. SDC Ltd and Defra have agreed the following
departments by that date. Discussions are also in progress outcomes that will govern the transition:
with the Devolved Administrations to determine the future
The staff of SDC Ltd will be treated fairly and given The current SDC Ltd Whitehall work programme will
opportunity, advice and support to find new roles in be brought to a close by the end of 2010-11 with exit
Government (as part of the new arrangements for strategies and/or handover agreed with UK Government
sustainable development) or elsewhere. departments as appropriate.
The decision to withdraw funding by Defra, which will lead decision to withdraw future funding and which cannot
to reduction or cessation of SDC Ltd’s activities, was taken be met from SDC Ltd’s 2010-11 budget. Defra have also
subsequent to the end of the 2009-10 financial year. undertaken to discuss with colleagues in the Devolved
Administrations how to manage/share any liabilities
However these events now mean that SDC Ltd is no longer arising from their own decisions relating to SDC Ltd.
a going concern and the accounts for 2009-10 have been
finalised on a break up basis. The impact of this decision Based on these developments, the directors of SDC Ltd
is significant and will give rise to considerable additional have concluded that a break up basis should be adopted in
liabilities, particularly in respect of the costs of redundancy. preparing the financial statements for the years ended 31
March 2010 and 31 March 2011.
Defra have undertaken that they will take on liability for
those extra costs which are conferred on SDC Ltd from its
The average number of persons employed by the company Following status change, the Comptroller and Auditor
during the period was 49. General (C&AG) was appointed to carry out SDC Ltd’s first
external audit in in relation to the fourteen month period
from 1 February 2009 to 31 March 2010.
Directors’ Report — 31
Statement of Directors’ Responsibilities
The Secretary of State of Defra has directed SDC Ltd to • State whether applicable accounting standards have
prepare for each financial year a statement of accounts in been followed, subject to any material departures
the form of abbreviated accounts under the Companies disclosed in the financial statements
Act which must conform to the accounting principles
and disclosure requirements of the Financial Reporting • Prepare the financial statements on a going concern
Standards for Smaller Entities (FRSSE) (effective from April basis unless it is inappropriate to presume that the
2008). Company law also requires the Directors to prepare company will continue in business.
financial statements for each financial year.
The Directors are responsible for keeping proper accounting
The Accounting Officer for Defra has designated the Chief records which disclose with reasonable accuracy at any
Executive of SDC Ltd as the Accounting Officer of SDC Ltd. time the financial position of the Company and enable
The responsibilities of an Accounting Officer, including them to ensure that the financial statements comply with
responsibility for the propriety and regularity of public the Companies Act 2006 and the Accounts Directives. They
finances for which the Accounting Officer is answerable, are also responsible for safeguarding the assets of the
for keeping proper records and for safeguarding SDC Ltd’s Company and hence for taking reasonable steps for the
assets, are set out in Managing Public Money published by prevention and detection of fraud and other irregularities.
HM Treasury.
Insofar as the Directors are aware:
The financial statements are required by law, the Accounts
Directive and the FRSSE to give a true and fair view of the
• there is no relevant audit information of which the
Company’s auditors are unaware; and
state of affairs and of the surplus or deficit of the Company
for that period. In preparing these financial statements, the • the Directors have taken all steps necessary to make
Directors are required to: themselves aware of any relevant audit information
and to establish that the auditors are aware of that
• Select suitable accounting policies and then apply information.
them consistently
The Directors are responsible for the maintenance and
• Make judgements and estimates that are reasonable integrity of the corporate and financial information included
and prudent on the Company’s website. Legislation in the United
Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other
jurisdictions.
At the time this Report is approved, the Directors are satisfied that:
• The Report has been prepared in accordance with the • The Directors have taken all necessary steps that
provisions applicable to small companies’ regime; they ought to have taken as Directors to make
themselves aware of any relevant audit information
• There is no relevant audit information of which the and to establish that the auditors are aware of this
auditors are unaware; and information.
Approved by the Board of SDC Ltd. and signed on its behalf by:
Andrew Lee
Chief Executive Officer
16 November 2010
Company registration no.6798740
I have audited the financial statements of The Sustainable in their preparation is applicable law and the Financial
Development Commission Limited (“SDC Ltd”) for the Reporting Standard for Smaller Entities (effective April
period ended 31 March 2010 which comprise the Profit and 2008) (United Kingdom Generally Accepted Accounting
Loss Account, the Balance Sheet and related notes. Practice applicable to Smaller Entities).
The financial reporting framework that has been applied
As explained more fully in the Statement of Directors’ accordance with applicable law and International Standards
Responsibilities, the directors are responsible for on Auditing (UK and Ireland). Those standards require me
the preparation of the financial statements and for and my staff to comply with the Auditing Practices Board’s
being satisfied that they give a true and fair view. Ethical Standards for Auditors.
My responsibility is to audit the financial statements in
An audit involves obtaining evidence about the amounts accounting estimates made by the directors; and the overall
and disclosures in the financial statements sufficient to presentation of the financial statements.
give reasonable assurance that the financial statements
are free from material misstatement, whether caused by In addition, I am required to obtain evidence sufficient to
fraud or error. This includes an assessment of: whether give reasonable assurance that the expenditure and income
the accounting policies are appropriate to the company’s reported in the financial statements have been applied
circumstances and have been consistently applied and to the purposes intended by Parliament and the financial
adequately disclosed; the reasonableness of significant transactions conform to the authorities which govern them.
In my opinion:
• the financial statements give a true and fair view of • the financial statements have been prepared in
the state of the company’s affairs as at 31 March 2010 accordance with the requirements of the Companies
and of its profit for the period then ended; Act 2006.
Auditors Report — 33
Opinion on Regularity Opinion on other matter prescribed by the
Companies Act 2006
In my opinion, in all material respects the expenditure and
income have been applied to the purposes intended by In my opinion the information given in the Directors’ Report
Parliament and the financial transactions conform to the for the financial year for which the financial statements are
authorities which govern them. prepared is consistent with the financial statements.
I have nothing to report in respect of the following matters where the Companies Act 2006 requires me to report to you if, in
my opinion:
• adequate accounting records have not been kept; or • I have not received all the information and
explanations we require for my audit; or
• the financial statements are not in agreement with the
accounting records and returns; or • the directors were not entitled to prepare the financial
statements and the directors’ report in accordance
• certain disclosures of directors’ remuneration specified with the small companies regime.
by law are not made; or
Date
Turnover 1 5,851,687
No statement of total recognised gains and losses is given as all gains or losses for the period passed
through the profit and loss account.
Financial Statements — 35
Balance Sheet as at 31 March 2010
£ £
Fixed Assets
Current assets
Debtors 5 520,321
1,171,260
Creditors
Reserves
Equity 67,215
These accounts have been prepared in accordance with the special provisions relating to small companies within Part 15
of the Companies Act 2006 and with the Financial Reporting Standard for Smaller Entities (effective April 2008).
The financial statements are intended, without limiting the The principal form of income is grant-in-aid received
information given, to conform with the requirements of the from Defra. This is treated as income in the accounts
Companies Act 2006 and the Financial Reporting Standard as it is provided to enable SDC Ltd to provide services
for Smaller Entities (effective April 2008). which support the delivery of its objectives. The bulk of
the remaining turnover is core funding from the Scottish
The accounts follow the accruals concept of accounting, and Executive, the Welsh Assembly Government and the Office
have been prepared under the historical cost convention. of the First Minister and Deputy First Minister, Northern
They have been prepared on a break up basis as SDC Ltd Ireland.
is not deemed to be a going concern (see further details
below). The remainder of the turnover is in the form of
contributions to project work.
Defra have undertaken that they will take on liability for The minimum level of capitalisation is £2,000.
those extra costs which are conferred on SDC Ltd from its
decision to withdraw future funding and which cannot Depreciation is provided on all tangible fixed assets at rates
be met from SDC Ltd’s 2010-11 budget. Defra have also calculated to write off the cost or valuation of each asset by
undertaken to discuss with colleagues in the Devolved the straight line method over the estimated useful life of
Administrations how to manage/share any liabilities the asset and is charged in the month of disposal but not
arising from their own decisions relating to SDC Ltd. in the month of purchase. Depreciation is not charged on
assets declared surplus to requirements. Lives are normally
Based on these developments, the directors of SDC Ltd in the following ranges:
have concluded that a break up basis should be adopted in
preparing the financial statements for the years ended 31 Information technology 2 to 12 years
March 2010 and 31 March 2011. Office Equipment 5 to 11 years
The terms and conditions of the schemes under which Fixed assets costing less than £2,000 are charged to the
redundancy would be paid are not yet agreed but the profit and loss account in the year of purchase. Impairment
maximum liability based on uncapped unrestricted figures costs of £21,089 have been included in administrative
is estimated at £1.3m. expenses in respect of writing down fixed assets to
estimated net realisable value.
SDC Ltd is not trading with a view to profit and HM Revenue Employees can opt to open a partnership pension account,
and Customs has confirmed it has no liability for Corporation a stakeholder pension with an employer contribution.
Tax. Employer‘s contributions of £15,600 for the period were
paid to one or more of the panel of three appointed
stakeholder pension providers. Employer contributions are
age–related and range from 3% to 12.5% of pensionable
Foreign Exchange pay. Employers also match employee contributions up to
3% of pensionable pay. In addition, employer contributions
Assets and liabilities in foreign currencies are translated of £841 for 2009–10, 0.8% of pensionable pay, were
into sterling at the rates of exchange ruling at the balance payable to the PCSPS to cover the cost of the future
sheet date. Transactions in foreign currencies are translated provision of lump sum benefits on death in service or ill
into sterling at the rate ruling at the date of the transaction. health retirement of these employees. Contributions due to
Exchange differences are recognised in the profit and loss the partnership pension providers at the balance sheet date
account. were £30,682. Contributions prepaid at that date were nil.
Pension benefits for most employees of the SDC Ltd are The Chair is not entitled to a pension scheme.
provided through the PCSPS. The PCSPS is an unfunded
multi–employer defined benefit scheme. SDC Ltd is unable SDC Ltd’s contributions to pension schemes for the period
to identify its share of the underlying assets and liabilities. are charged to the profit and loss account in the year.
The scheme actuary valued the scheme as at 31 March
2007. Details can be found in the Resource Accounts of the
Cabinet Office: Civil Superannuation.
Disclosure on Government Grants
For the period 1 February 2009 to 31 March 2010,
employer‘s contributions of £352,347 were payable to the Grant-in-aid received to support revenue expenditure is
PCSPS at one of four rates in the range 16.7% to 24.3% credited to income in the profit and loss account for the year
of pensionable pay, based on salary bands. The Scheme to which it relates. Grants received outside of grant-in-aid
Actuary reviews employer contributions usually every four are matched to the corresponding project expenditure in
years following a full scheme valuation. From 2010–11, the the year in which it is incurred. SDC Ltd does not receive
rates will be in the range 16.7% to 24.3%. The contribution grant-in-aid for capital expenditure.
rates are set to meet the cost of the benefits accruing
during 2009–10 to be paid when the member retires,
and not the benefits paid during this period to current
pensioners.
£
Depreciation of tangible fixed assets 31,787
3 Directors’ Emoluments
Total 134,321
£ £ £
Depreciation
On change of status and incorporation, SDC Ltd took over from Defra, IT and office equipment with a net book value of
£40,707. There were no disposals during the period. Following the decision that the SDC Ltd was not a going concern, the
fixed assets were written down to their likely realisable values as at 31 March 2011, the intended date of disposal.
5 Debtors
31 March 2010
£
Due within one year
520,321
31 March 2010
£
Trade creditors 463,760
1,112,965
7 Capital Contribution
On transfer of the activities from Defra to SDC Ltd on 1 a Capital Contribution within Reserves at an amount
February 2009, certain fixed assets used in the business equivalent to their net book value at the time of £40,707.
were also transferred and have been accounted for as
8 Contingent Liabilities
9 Commitments
Capital Commitments
31 March 2010
£ £
Operating Leases which expire:
The company receives its grant-in-aid funding from the Department of Environment, Food and Rural Affairs (Defra) and
core and project funding from the Welsh Assembly Government, Scottish Government and Northern Ireland Executive.
The total transactions between the company and those bodies were as follows:
1 February 2009 to
Individual Commissioner Position Organisation 31 March 2010
Alice Owen Associate Director Ove Arup and Partners Ltd 41,066
BT Leadership Panel
Jonathan Porritt Chairman of Panel
(BT in general)
5,771
Peter Davies Member of Panel BT Wales Advisory Panel
Anna Coote Head of Public Sector Policy New Economics Foundation 2,000
Total 76,543
As a result of the Ministerial announcement on 22 July their own operations and funding arrangements in the
2010, stating that Defra was withdrawing its funding from light of that announcement. Dependent upon the outcome
SDC Ltd at the end of the 2010-11 financial year, there is of those reviews, the activities of SDC Ltd will either have
now no likelihood that the Whitehall part of SDC Ltd will ceased completely or been radically reduced by the end of
continue in financial year 2011-12. The remaining three the 2010-11 financial year.
members (the devolved administrations) are reviewing
The SDC Ltd is a private company limited by guarantee. Funding is received from all four Governments but
Its members, who act as guarantors, are the four the major sponsoring body is Defra who in 2009-2010
administrations: contributed over three quarters of the core funding from
• Defra the four administrations. For this reason Defra is considered
to be the ultimate controlling party.
• The Welsh Assembly Government
• The Scottish Government
• The Northern Ireland Executive.
43
The Sustainable Development Commission Limited Offices
Endnotes
1 FT, 29 November 2009, www.ft.com/cms/s/2/2fb47d30-dae5-11de-933d-00144feabdc0.html – the commercially published version of Prosperity without
Growth, published by Earthscan, was selected as one of the FT’s 16 Business and Economics Books of the Year.
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