Scope

The House of Lords Administration presents the accounts of the House of Lords for the financial year ended 31 March 2010. The Resource Accounts contain the financial statements relating to the House of Lords Members' expenses and administration etc. Request for Resources, which includes catering and works services expenditure. Information is also included, by way of notes, on the House of Lords Security Fund, the House of Lords Works of Art Collection Fund and the House of Lords Refreshment Department trading activities.

Aims and Objectives

The aim of the House of Lords Administration is to enable the House and its Members to carry out their parliamentary and judicial functions fully and effectively.

The core tasks of the House of Lords Administration in 2009-10 have been:

• to meet the needs of the House and its committees;
• to meet the parliamentary and judicial needs of individual Members regardless of party or office;
• to make the House and its work accessible to the public; and
• to maintain the heritage and integrity of the House's buildings and collections.

Principal Activities

The House of Lords is the second Chamber of the United Kingdom Parliament and as such is one of the busiest parliamentary chambers in the world. It plays an important part in revising legislation and scrutinising Government policy.

Up until the creation of the UK Supreme Court, the House of Lords was the ultimate court of appeal in the United Kingdom for all cases except Scottish criminal cases. This work was carried out by 12 Lords of Appeal in Ordinary (Law Lords).

MANAGEMENT COMMENTARY

a. Significant events during the year

Law Lords and the UK Supreme Court

The Law Lords and Judicial Office function transferred to the new UK Supreme Court during the summer of 2009. The last judicial sittings in the House of Lords took place in July 2009, the new Supreme Court subsequently commenced in October 2009.

Works and Accommodation

The refit of the Millbank Island site has continued during 2009-10. Due to the nature of the renovation and additional works, Members and staff who occupied the building have decanted to 14 Tothill Street for a period of two years until the Millbank Island site renovation is complete.

Review Body on Senior Salaries (SSRB) report

In the light of both the media allegations and concerns over the Members' Reimbursement Scheme during 2009-10, the House Committee of the House of Lords asked the Prime Minister to commission the Review Body on Senior Salaries (SSRB) to carry out a review of the financial support for Members of the House of Lords and to make recommendations. The SSRB's report 'Report no. 71 - Review of financial support for Members of the House of Lords' was published on 26 November 2009.

On 15 December 2009, following the agreement of the House to the principles and architecture of the report by the SSRB, the House appointed an ad-hoc group "to consider and consult on issues in the report and to advise on their implementation". The group is expected to report to the House Committee early in the 2010-11 Parliament.

b. Important events which have occurred since the financial year end

A General Election was held on 6 May 2010 which led to the creation of a new government; a coalition between the Conservative Party and the Liberal Democrats. As a result of the new government there were ministerial changes in the House of Lords and Lord Strathclyde became Leader of the House.

From the start of the new Parliament (on 18 May), all Members seeking to claim night subsistence must sign a declaration stating the location of their principal residence and provide copies of documents to verify that their principal residence is outside Greater London.  

A new Code of Conduct for Members, which sets out rules on Members' expenses, interests and employment, was adopted by the House at the start of the new Parliament on 18 May. All complaints about Members' conduct, including complaints about expense claims, will be considered by a new office of Lords Commissioner for Standards. The position of the independent Lords Commissioner for Standards is enshrined in the new Lords Code of Conduct, and Paul Kernaghan, former Chief Constable of Hampshire Constabulary, was appointed as the Lords' first Commissioner for Standards on 2 June 2010.

c. House of Lords Annual Report and Business Plan

Further details on the activities of the House of Lords in 2009-10 are contained in the Annual Report 2009/10 (HL Paper 20) and in the booklet The Work of the House of Lords. Additionally, the House of Lords Business Plan 2010/11 (HL Paper 71) sets out services to be provided by the Administration for the period 2010-13. Both are published on behalf of the House of Lords by The Stationery Office and are available via bookshops and on the internet (www.parliament.uk).

D. OPERATING AND FINANCIAL REVIEW

The 2009-10 Resource Accounts have been prepared in accordance with International Financial Reporting Standards (IFRS), note 2 of the accounts details the transitional amendments required in prior years to move from UK GAAP to IFRS. The House of Lords Administration's outturn on net total resources for 2009-10 was £111.7M which was £6.7M lower than the Estimate. The main explanations for this variation against the Estimate are:

• Movements in the valuation of the Parliamentary Estate led to the associated non-cash expenditure being less than anticipated by £1.1M and £1.9M on depreciation and cost of capital respectively
• Depreciation was underspent by £0.3M as a direct result of lower than budgeted spend on capital investment
• Shared services projects other than PICT and Estates projects were underspent by £0.2M
• Spend on IT related projects and PICT services was underspent by £1.7M primarily due to the provided budget not being required in the current year
• Efficiency savings of £0.3M in relation to the Metropolitan Police Security contract
• Staff pay and related costs were underspent by £0.5M mainly due to vacancies in a variety of posts throughout the year
• Lower than anticipated operational spend led to an underspend of £0.7M

During 2009-10 taxpayers' equity reduced significantly. This was due to the downward revaluation of Parliamentary Estate (£141.4M) and the revaluation and actuarial movements in the pension liability (£27.5M).

e. Management

Members of the House of Lords (except ministers, certain office holders and Lords of Appeal in Ordinary) do not receive a salary. They are entitled to recover travel and certain other expenses incurred in connection with their parliamentary duties. Members other than ministers and certain office holders are entitled to recover, up to a specified maximum, the cost of overnight accommodation, subsistence and office costs certified by them as incurred for the purpose of their parliamentary duties at sittings of the House and its committees.

Three Members - the Lord Speaker, Chairman of Committees and Principal Deputy Chairman of Committees - are eligible for a salary paid from House of Lords' funds. As at 31 March 2010 the annual salaries for 2009-10 were as follows:

Lord Speaker	£104,368
Chairman of Committees (including £1,667 London Supplement	£86,191
Principal Deputy Chairman of Committees (including £1,667 London Supplement)	£80,743

Details of the remuneration of the Management Board of the House of Lords are contained in the Remuneration Report.

F. PENSIONS

Present and past employees of the House of Lords are covered by the provisions of the House of Lords Staff Pension Scheme (HOLSPS). The scheme is an unfunded defined benefit scheme which is operated 'by analogy' with the Principal Civil Service Pension Scheme. The statement of financial position includes a provision against which future pension benefits will be charged when paid. The annual accruing cost of benefits is charged to the operating cost statement (see notes 1.12 and 18).

Public Interest and Other

Equal Opportunities, Diversity and Disability

It is House of Lords policy that its staff shall have equality of opportunity for employment and advancement on the basis of their ability, qualifications and suitability for work. There must be no discrimination on grounds of gender, marital status, age, race, colour, disability, religious affiliation or sexual orientation. This policy is in line with Civil Service policy statements, United Kingdom legislation on equality of opportunity and equal pay, and European Union law. Equal opportunities and diversity training are compulsory for all staff and the Equal Opportunities and Diversity Officer is available to advise staff and managers on equal opportunities and diversity matters.

Payments to Suppliers

The House of Lords Administration is committed to the Better Payment Practice Code. The policy is that all bills should be paid in accordance with credit terms, or where no such terms exist, within 30 days of the receipt of the goods or services, or the presentation of a valid invoice, whichever is the later. Payments with regard to Works Services are made in the first instance by the House of Commons.

The calculation of payment performance for 2009-10 has been based on continuous monitoring of payments throughout the year and 97.3% (2008-09 96.3%) of payments made by the House of Lords met the policy criteria.

Staff Issues

The Clerk of the Parliaments attaches importance to ensuring effective consultation and involvement of staff. Certain trade union organisations, and the House of Lords (Parliament Office) Staff Association, have been recognised by the House of Lords for the purposes of negotiating terms and conditions of service, and are represented on the House of Lords Whitley Committee. Additionally, staff involvement is encouraged as part of the day to day process of line management and staff are consulted as part of the annual business planning process.

Auditor

The Comptroller and Auditor General is the external auditor for the House of Lords. The notional audit fee for 2009-10 was £100,000 (2008-09 - £103,000). No further assurance or advisory services were provided by the auditors.

So far as I am aware, there is no relevant audit information of which the NAO are unaware. I have taken all the steps that I ought to have taken to make myself aware of any relevant audit information and to establish that the NAO are aware of the information.

Michael Pownall

Clerk of the Parliaments and Accounting Officer

16 July 2010